Chicago Business Litigation Lawyer Blog

Second Circuit to Rule on Whether Retailer May Be Held Liable for Failing to Stop Sales of Counterfeit Products

October 7, 2009 | Peter S. Lubin and James V. DiTommaso

Our Illinois trademark infringement lawyers and many others involved in online commerce are awaiting an important ruling from the Second U.S. Circuit Court of Appeals. As the American Lawyer noted July 17, the court heard oral arguments the day before in Tiffany v. eBay (USDC SD NY opinion), in which the famous jewelry retailer sued online auction company eBay for trademark infringement. Tiffany does not claim that eBay directly infringed its trademarks, but that the auction company fails to do enough to stop its users from selling counterfeit Tiffany products. The appeal to the Second Circuit followed a loss for Tiffany in trial court, where a New York judge ruled that the company failed to make its case for trademark infringement, unfair competition, false advertising and dilution.

In the original suit, Tiffany alleged that eBay allowed hundreds of thousands of counterfeit silver jewelry items to be sold on its Web site over three years. Even though these items were sold by individual users of the site rather than eBay itself, Tiffany argued that eBay was liable for not taking strong enough steps to stop the infringing sellers. As Richard J. Sullvian, the trial judge in the case, observed, the heart of the case was the question of who should police Tiffany’s trademarks online. That judge found that the burden fell on Tiffany itself. Relying on Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982), the judge wrote that eBay should only be liable if it continued to permit sellers after it knew or should have known about their infringement. He ruled that it did not, and in fact went into detail about eBay’s efforts to reduce counterfeiting.

The same issues were the focus of the Second Circuit’s oral arguments, the American Lawyer said. According to the article, a trademark attorney for Tiffany argued that eBay is aware of ongoing problems with counterfeiting, yet continues to allow sellers to sell alleged Tiffany products at suspiciously low prices. He suggested remedies to the court including a zero-tolerance approach to sellers caught counterfeiting and a policy of verifying suspicious goods before they are publicly posted. In response, an attorney for eBay noted that the company spends $18 million a year fighting counterfeiters and takes down listings immediately when their legality is challenged. He further suggested that Tiffany is trying to force eBay to shoulder the work and cost of policing Tiffany’s brand.

This is a closely watched case, with amicus briefs filed by major online retailers and Internet companies, as well as by companies and industry groups whose products are frequently counterfeited. Our Chicago Internet trademark litigation attorneys would not be surprised to see a further appeal to the U.S. Supreme Court after the ruling comes down from the Second Circuit. Trademark holders like Tiffany have a very good reason to be vigilant about trademarks. Allowing others to hijack their brand names dilutes the value of their products, and thus their businesses. However, forcing online companies like eBay to preemptively take down all listings could cripple their business and, ironically, encourage users to move to a black market site willing to break the law.

Appeals Court Decides Client May Sue Insurance Broker for Taking Kickbacks From Insurers

October 5, 2009 | Peter S. Lubin and James V. DiTommaso

In a proposed class action insurance fraud lawsuit, the Illinois First District Court of Appeal has ruled that a former client may sue an insurance broker for inflating the cost of its insurance policies with “kickbacks.” DOD Technologies v. Mesirow Insurance Services Inc., No. 1-06-3300 (Ill. 1st Feb. 14, 2008). Plaintiff DOD Technologies sued Mesirow Insurance Services Inc., its insurance broker, after learning that Mesirow took contingency fees from insurance companies for steering clients toward those companies.

In its complaint, DOD said it provided confidential information to Mesirow, expecting the broker to get DOD the best price it could for insurance. But in addition to its commission from DOD, Mesirow also received “contingent commissions” from insurance companies, which were payments based on the amount of business it directed to the insurer, the number of renewals and how many losses the insurer had suffered from those clients. The payments were not disclosed to customers, DOD alleged, and created a conflict of interests for Mesirow. They also violated a part of the Illinois Insurance Code that require insurance brokers to disclose fees not directly related to premiums.

DOD sued Mesirow for breach of fiduciary duty, consumer fraud, fraudulent concealment, unjust enrichment and accounting. The complaint alleged that Mesirow steered customers to insurers who paid kickbacks, regardless of whether those insurers offered the best price, inflating the cost of insurance. The trial court dismissed three of DOD’s counts because the Insurance Code precludes breach of fiduciary duty claims and two others because it found no proof that DOD suffered damages or relied on the fraudulent concealment. DOD appealed.

Damages Not Duplicative Under Lanham Act and Anti-Cybersquatting Consumer Protection Act, Eleventh Circuit Rules

September 30, 2009 | Peter S. Lubin and James V. DiTommaso

In a ruling that clarified laws important to our Chicago and Wheaton internet trademark infringement and business trial lawyers, the Eleventh U.S. Circuit Court of Appeals ruled July 9 that actual damages for service mark infringement under the Lanham Act do not duplicate statutory damages under the Anti-Cybersquatting Consumer Protection Act. In St. Luke’s Cataract and Laser Institute v. Sanderson, No. 08-11848 (11th Cir. July 9, 2009), the court also found that a lower court did not err in denying a motion for a new trial on copyright claims by the clinic and a motion for judgment as a matter of law by Dr. James Sanderson.

Sanderson worked at St. Luke’s, a private clinic, as its only cosmetic eye surgery specialist between 1995 and 2003. In 1998, they launched a Web site advertising Sanderson’s services at St. Luke’s, at lasereyelid.com and laserspecialist.com, using LaserSpecialist.com as a logo and service mark. Both the doctor and the clinic contributed content to the site, and a copyright notice attributed the site to the clinic. St. Luke’s paid directly for the site’s creation and maintenance, although Sanderson testified that these costs were deducted from his pay as “overhead,” which St. Luke’s disputed. The clinic’s webmaster provided backup disks to Sanderson.

Sanderson left St. Luke’s in June of 2003 to start a solo practice. The webmaster transferred ownership of the domain names into Sanderson’s name at his request. Sanderson later testified that he did not ask anyone else at St. Luke’s for permission to take ownership of the site. A few months later, Sanderson relaunched the site without references to St. Luke’s or links to its main site. The clinic noticed this in 2005 and removed links from its own site to Sanderson’s site. In January of 2006, it registered a copyright to a version of the site from 2003, claiming ownership of all of the content.

A month later, it sued Sanderson for copyright infringement, Lanham Act and Digital Millennium Copyright Act claims, Anti-Cybersquatting Consumer Protection Act (ACPA) claims, unfair competition, unfair business practices and misappropriation of the domain names. Sanderson counterclaimed for a declaratory judgment that the copyright was unenforceable. The jury found that the copyright was indeed unenforceable, but found for St. Luke’s on all other counts, awarding $150,000 in damages and about $587,000 in attorney fees and costs. The court later reduced the damages award to $98,000, saying the statutory damages under the ACPA duplicated the actual damages awarded for service mark infringement. Both parties appealed on multiple grounds. The Eleventh took up the questions of the duplicative damages; the issue of whether Sanderson should have succeeded on his motion for a judgment as a matter of law on the unfair competition and service mark claims; and the issue of a new trial for St. Luke’s on the copyright claims.

The Eleventh affirmed the trial court on every issue but the duplicative damages, which it found were not duplicative, for several reasons. The Anti-Cyberpiracy Act explicitly says that damages should be awarded in addition to any other civil action or remedy available. Furthermore, the court argued, the laws allow damages for different purposes — the ACPA awards them as sanctions against bad faith conduct, while the Lanham Act awards them as compensation for losses. The Lanham Act allows plaintiffs to choose a statutory damages award rather than an award of actual damages, the court noted. E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 278 (5th Cir. 2002). Thus, it remanded that part of the case, with instructions to reinstate the cyberpiracy damages award.

However, it affirmed the trial court on the new trial issue and the judgment as a matter of law issue. Citing extensive evidence from the trial, it found that the jury had good reason to find that the clinic’s copyrights to the site may not be valid. One copyright was not registered until months after the clinic filed its suit, the court noted, which violates well-established precedent saying that a valid copyright is a necessary prerequisite for suing. The other copyright was registered beforehand, it said, but with overly broad claims that attempted to copyright stock photos, material Sanderson provided and copy from Botox manufacturers. The court noted that intentional misrepresentations and omissions can render a copyright invalid. Original Appalachian Artworks,
Inc. v. Toy Loft, Inc., 684 F.2d 821, 828 (11th Cir. 1982). Because there was evidence that St. Luke’s may have intentionally misrepresented information on its application for the earlier copyright, the court found that it was not entitled to a new trial on that claim.

Finally, the court denied Sanderson’s claim that the trial court should have granted judgment as a matter of law on the service mark infringement and unfair competition claims. There was sufficient evidence to show that the name “LaserSpecialist.com” was a service mark for St. Luke’s, the opinion said, and that it was worthy of protection. Furthermore, the court said, there was sufficient evidence to show that the term had acquired a secondary meaning, as the law requires. St. Luke’s had advertised it extensively for several years, and evidence showed that patients both used it and were referred to it frequently. Thus, there was a clear likelihood of confusion, as required by the law — meaning that the trial judge did not err in denying judgment as a matter of law.

First Amendment Protects Allegedly Defamatory Statements in Men’s Clothing Advertisement, Illinois Supreme Court Rules

September 29, 2009 | Peter S. Lubin and James V. DiTommaso

Statements in an advertisement for a men’s clothing retailer may have been in poor taste, but they are still protected by the First Amendment to the U.S. Constitution, the Illinois Supreme Court has ruled. In Imperial Apparel Ltd. v. Cosmo’s Designer Direct Inc., Ill., No. 103331 (Feb. 7, 2008), retailer Imperial Apparel sued Cosmo’s after the latter retailer ran an advertisement insulting a competitor that was widely understood to be Imperial. Objecting to Imperial’s appropriation of Cosmo’s signature “3 for 1” sales policy, the Cosmo’s ad disparaged Imperial’s quality and business practices. The ad also used references to the Jewish heritage of the family that owned Imperial, the Rosengartens.

The Rosengartens and Imperial sued Cosmo’s and the Chicago Sun-Times, the newspaper that ran the advertisement. They made claims against both defendants for defamation per se, defamation per quod, false light invasion of privacy, commercial disparagement and violations of the Illinois Consumer Fraud Act. The Cook County trial court in the case dismissed all of their complaints, with prejudice, on the grounds that the advertisement was protected free speech under the First Amendment to the U.S. Constitution. That court used a fact versus opinion test — were the statements intended as opinion? It concluded yes.

The Rosengartens appealed and had better luck with the appellate court, which reversed the false light, consumer fraud and commercial disparagement claims as to all plaintiffs. It also reversed the defamation per quod claim as to the Rosengartens personally, but not Imperial, because the Rosengartens could not show that they personally were financially harmed. However, it upheld the dismissal of the defamation per se count. Citing a paragraph in which Cosmo’s accused Imperial and the Rosengartens of “inflat[ing] prices and compromis[ing] quality,” it found that a reasonable reader could interpret those statements as facts. Cosmo’s and the Sun-Times then made the instant appeal.

Second District Reverses Trial Court’s Judicial Determination of Fair Market Value in Shareholder Dispute

September 23, 2009 | Peter S. Lubin and James V. DiTommaso

As Chicago shareholder dispute attorneys, we noted with interest a recent decision on calculating fair market value of stock owned by a dissenting shareholder. Brynwood Company v. Schweisberger, No. 02-06-1178, (Ill. 2nd Dist. July 23, 2009) pitted a corporation against its co-founder and majority shareholder. The Brynwood Company, which is now dissolved, was an Illinois C corporation organized in 1979. It existed only for the purpose of owning and administering an office building in Rockford, Ill. Stuart Schweisberger was a founder of Brynwood, the president, a member of the board of directors until 2000 and a tenant with an accounting firm in the building. He was also the accountant for Brynwood until 1994.

Schweisberger retired in 1996 with 26% of the company’s stock. In 1999 and 2000, the Brynwood board began to consider ways to change the corporation, including selling the building and dissolving the corporation. In 2001, Schweisberger negotiated with Brynwood to sell his shares, but negotiations ultimately faltered. In 2002, Brynwood notified Schweisberger that it had an offer to sell the building to a third party, but wanted to convert to an S corporation to avoid income tax liability instead and hold on to it for 10 more years. Schweisberger did not consent to the conversion, in part because it would require changes to his IRA. When Brynwood failed to get his consent, it held a meeting at which shareholders agreed to sell the building and dissolve the corporation.

The building was sold for $1.4 million, with $959,282 in capital gains. The mortgage of $353,080 was paid from the proceeds, and another $446,593 was paid in taxes, professional fees and other costs. A bit more than a week after the sale, Schweisberger filed a notice objecting to the sale and demanding payment of the “fair value” of his shares under the Illinois Business Corporation Act of 1983. When Brynwood dissolved, it estimated fair value of the shares at $30.08; Schweisberger estimated fair value at $66.31 and also demanded 6.75% interest, which was the former mortgage’s interest rate. In October, Schweisberger surrendered his shares in exchange for the $30.08 price plus a much lower interest rate based on the interest earned on the certificate of deposit holding the proceeds of the sale. However, in December of 2002, Brynwood filed for a judicial determination of the fair value of Schweisberger’s stock and interest due to him.

At trial, the basis for the difference between Schweisberger’s and Brynwood’s valuations became clear. Schweisberger testified as his own expert witness, saying he came to the $66.31 valuation by excluding the costs of capital gains taxes, fees and costs. Because he objected to the sale, he said, he thought his shares should be calculated without those costs. Brynwood’s expert, accountant Gary Randle, testified that the fair valuation should be calculated according to what each individual shareholder eventually received from the liquidation, which he put at $36.15 per share. He said if Schweisberger had actually received his requested $66.31 per share, other shareholders would have received about $25 a share. Another expert witness for Schweisberger, accountant Mark Patterson, testified that he believed the value could also be calculated as a “going concern,” cutting out the taxes, fees and costs from the sale.

Before and during trial, Brynwood objected to Patterson’s presence and testimony. It said Patterson was unqualified to give testimony because he had admittedly never valued this type of company before. It also contended that his testimony was nothing more than a definition of the legal term “fair value.” The court twice dismissed these objections.

The trial court found that Schweisberger timely exercised his right to dissent and that the board knew the sale would trigger taxes, fees and costs. Because of that, and because the only reason for the sale was the majority’s preference, it found that Schweisberger’s shares should be calculated without taking those costs into account. It also found that the interest rate should be the 6.75% interest Schweisberger had requested, giving rise to a share value of $60.68. This gave Schweisberger a judgment of $181,130.45. Brynwood appealed.

The Second District started by addressing Brynwood’s concerns at trial: that Patterson should not have been allowed to testify as an expert because he had never valued this type of company, and that admitting his testimony was an abuse of discretion because he was doing nothing more than interpreting the words “fair value.” The appeals court disagreed. Valuation is part of the business of accounting, it said, and experience in valuing a particular type of business is unnecessary. Furthermore, a review of Patterson’s testimony shows that it included reasons for his opinions, not just the definitions of terms. Thus, the trial court did not abuse its discretion in admitting the testimony, the Second said.

Brynwood had more luck with its argument that the trial court’s valuation decision was against the manifest weight of the evidence. The company argued that by subtracting taxes, costs and fees, the court artificially inflated the value of Schweisberger’s shares at the expense of the majority of shareholders. The court agreed, saying that excluding those costs did not meet the Business Corporation Act’s goal of fair and equal treatment for all shareholders. Capital gains taxes and other costs are intrinsically tied to the value of a closely held real estate company like Brynwood, the court wrote, and thus to its stock’s value. This made the trial court’s decision against the manifest weight of the evidence. Thus, the appeals court overturned that decision and sent it back to trial court for a new determination of value, taking taxes, costs and fees into account.

Company May Not Enforce Judgment Against Individual and Partnership Not Named in Original Claims, Third District Finds

September 16, 2009 | Peter S. Lubin and James V. DiTommaso

Our Chicago partnership dispute attorneys noted with interest a recent ruling strictly limiting how creditors may hold individual partners liable for the judgment debts of their partnerships. In Sunseri v. Moen, No. 3-07-0468 (Ill. 3rd May 15, 2008), the Third District Court of Appeal ruled that creditor Jack Sunseri and his company, Consolidated Partners Ltd., may not enforce a New York state ruling against Janet Moen, a partner of Macro Cellular Partners. The appeals court said a foreign judgment is unenforceable against an individual partner unless the judgment was against that partner, or the creditor makes a case establishing the partner’s liability.

In the underlying lawsuit, Sunseri successfully claimed that Macro’s general partner took actions designed to deprive Sunseri of partnership distributions. Sunseri was awarded nearly $6 million in damages against Macro in 2005, in New York state court. That court entered judgment against Macro, and later in the same year, an attorney for Sunseri petitioned a Rock Island County court to enter judgment against Moen individually as a partner of Macro. The matter was set for a hearing in early 2006, but on the day before, Moen filed a motion to stay judgment because she was not an individual defendant in the New York case, and because an appeal in that case was pending.

After a series of motions and hearings, a Rock Island County judge ruled that Sunseri could continue discovering the partnership’s assets, but that enforcement against Moen’s personal assets must fail because the original action did not name her as an individual, as required by Johnson v. St. Therese Medical Center, 296 Ill. App. 3d 341, 345 (1998). Sunseri then petitioned for leave to amend his complaint to add Moen as an individual. This was granted, but Moen successfully moved to dismiss it with prejudice under the Illinois statute of limitations. In granting that motion, the court also noted that Sunseri may not, under the Illinois Code of Civil Procedure, enforce judgment against Moen individually when the New York judgment named only the partnership. After a motion to reconsider was denied, Sunseri filed the instant appeal.

On appeal, the Third District first considered whether the trial court erred when it stopped Sunseri’s citation proceedings against Moen’s personal assets. The controlling law is the Uniform Enforcement of Foreign Judgments Act, the court wrote, which is “unequivocal” about its limited scope. Under the Act, the judgment debtor may only be a party named in the foreign court’s judgment order — and a judgment against a partnership is enforceable only against property actually in the partnership’s name. Sunseri’s counsel improperly expanded the scope of the original judgment when they named Moen as an individual partner, the Third District said, causing confusion in the trial court. In fact, the court wrote, “The record indicates Sunseri … desired to expand the New York decision to reach Moen without judicial approval or further court order.”
Sunseri further argued that his right to collect against Moen is settled under res judicata. It’s undisputed that creditors may use a valid foreign judgment against a partnership to establish individual partners’ liability, the court said — but it is not automatic. Sunseri should have registered the judgment against the partnership rather than Moen, the court said, then sought to establish Moen’s individual liability on the grounds that Macro’s assets were insufficient (because it was insolvent). However, he registered it only against Moen. Thus, not only did the trial court properly vacate the citation against Moen’s individual assets, the appeals court said, but it should have vacated the one against Macro as well.

Finally, the court considered the issue of whether the trial court property dismissed Sunseri’s amended complaint, or should have allowed his motion to reconsider that ruling. The parties brought up issues of statute of limitations, the Third wrote, but these are irrelevant — because, again, there was no foreign judgment against Moen. Illinois law won’t allow creditors to collect on foreign judgment debts that don’t exist, so the trial court acted properly when it dismissed Sunseri’s amended complaint with prejudice. Thus, the Third District upheld that decision and the decision to vacate orders, but also reversed the trial court’s decision to allow the citation against partnership assets.

Financial Consultant Did Not Breach Fiduciary Duty to Bank Takeover Candidate, Appeals Court Rules

September 14, 2009 | Peter S. Lubin and James V. DiTommaso

A trial court was correct to find for defendants in a breach of fiduciary duty and constructive fraud lawsuit, the First District Court of Appeal ruled March 20. In Prodromos v. Everin Securities Inc., No. 1-06-3685 (1st. Dist. March 20, 2009), plaintiff John Prodromos sued Everin Securities, Inc., its predecessor company, Daniel Westrope and Dennis Klaeser over an allegedly stolen opportunity.

Prodromos was a former president and CEO of Howard Savings Bank, a family business. He was fired by his sister in 1994 after he was fined by the FDIC for failing to waive a fee and for violations of state law. In 1998, he wanted to purchase Home Federal Bank, which was looking for an investor, but needed help. He approached his broker at Everin, who connected him to Westrope, an investment banker there. After a meeting attended by all three, Westrope agreed to contact shareholders at Home Federal about voting for Prodromos in a proxy vote, but no agreement was signed and no fees were paid.At the time, Westrope had already been hired away from Everin by State Financial Services Corporation, something he did not disclose to Prodromos.

After Prodromos submitted some follow-up information to Westrope, the latter man was not responsive to messages from Prodromos. About a month after the meeting, Westrope moved to State Financial. His replacement at Everin, Klaeser, told Prodromos that Everin would not support his purchase attempt because it would be bad for the firm’s investment banking business. Prodromos met with several other banks and an attorney, but did not follow up with most. He did strike a deal for financing through Success Bank, but that deal fell through when one of the Success officials involved died suddenly. His efforts ended. A few months later, State Financial acquired Home Federal and installed Westrope as CEO and president of the bank.

Fiduciary Shield Doctrine Does Not Apply When Fiduciary Is Motivated By Personal Interests, First District Says

September 9, 2009 | Peter S. Lubin and James V. DiTommaso

A trial court may have personal jurisdiction over a defendant outside Illinois, but only if it can determine that the defendant’s alleged tort was motivated for personal reasons, the First District Court of Appeal has ruled. Femal v. Square D Company, No. 1-07-1990 (Ill. 1st Jan. 29, 2009). The ruling came in a complex Illinois business dispute between Michael Femal, a former employee at electrical equipment manufacturer Schneider Electric, and James O’Shaughnessy, a lawyer for a company accused of violating a Schneider patent.

Femal patented a process for his employer, Square D, which was bought by Schneider Automation, Inc. Schneider sold the patent to Solaia Technologies, which was to enforce the patent and give Schneider a percentage of its earnings. Schneider agreed to let Femal help Solaia enforce the patent, for which he was to get 2% of Solaia’s earnings.

Among the alleged infringers Solaia sued was Wisconsin-based Rockwell International, which countersued Solaia for bad faith patent enforcement. The sides had a settlement conference in Illinois that included O’Shaughnessy, Rockwell’s attorney. At this meeting, Rockwell raised allegations that Femal could best refute, leading Solaia to cancel its percentage arrangement with Femal and put him on a much less lucrative hourly wage to serve as a witness. Schneider then hired outside counsel to look into the propriety of Femal’s percentage arrangement with Solaia, and eventually fired him for misuse of compay assets, gross misrepresentations and gross failure of professional judgment.

Software Company Sues Google for Allowing Competitors to Buy Advertisements Using Its Trademarks

September 9, 2009 | Peter S. Lubin and James V. DiTommaso

As Illinois Internet trademark infringement attorneys, we have kept track of the series of lawsuits filed against Google for selling advertisements using trademarked names and phrases. So we were not surprised to see an article in BusinessWeek July 13 announcing that Rosetta Stone, a maker of language-learning software, has sued Google for allowing competitors to buy its name for use in its Google AdWords advertisements. This was the ninth such lawsuit against Google for the same practices, although some have since been resolved.

Under the program, competitors to Rosetta Stone may bid for the right to have their own advertisements appear on the page of search results when a user searches for “Rosetta Stone.” The company contends that this is an illegal use of its trademark that forces it to spend thousands of dollars bidding on the keywords, so that competitors cannot have them. According to the article, the lawsuit was inspired by the loosening of Google’s AdWords restrictions. Until June 15, companies could not put the competitor’s name in their advertisements, although they could purchase the right to appear when users search for competitors. Now they may do either. This is tantamount to allowing competitors benefit from the goodwill and name recognition Rosetta Stone has invested in building, the company’s general counsel said.

The lawsuit’s chances are unclear. As the article points out, the case will likely hinge on whether consumers are legitimately confused by Google’s practices. No court has clarified this, making it an unsettled area of the law. However, in a different case, the Second U.S. Circuit Court of Appeals reinstated a software company’s lawsuit against Google, saying selling trademarks as keywords counts as a “use in commerce” under trademark law. While trial courts in other circuits, including our own Seventh, are free to disagree, our Chicago Internet trademark litigation lawyers believe this is a promising sign that courts will allow a jury to consider the likelihood of consumer confusion.

Business Liable for Notary’s Misconduct Under Common Law But Not Statute, First District Rules

August 30, 2009 | Peter S. Lubin and James V. DiTommaso

In a case of first impression, the Illinois First District Court of Appeal has ruled that copy shop Kinko’s may not be held liable under the Illinois Notary Public Act for misconduct by a notary it employed, but may be held liable for common-law negligence. In Vancura v. Katris, No. 1-06-2750 (Ill. 1st. Dec. 26, 2008) , the appeals court found that Kinko’s did not consent to the misconduct and vacated $233,000 in jury awards.

Plaintiff Richard Vancura helped fund a real estate investment by defendant Glenn Brown, who had trouble reselling the property. A mutual acquaintance, Randall Boatwright, agreed to give Vancura shares in his company in exchange for Brown’s debt to Vancura, which he agreed to lower. Brown then struck a related deal giving defendant Peter Katris an interest in the property and arranged a real estate closing at which all of these deals would be sealed. Boatwright and his business partner had Vancura sign some papers on the day before the closing, but then realized that some would have to be notarized. They visited a local Kinko’s for that purpose, but without Vancura. One of the documents they left with had purported signatures from Vancura and Gustavo Albear, the notary.

Several months later, Vancura called Brown and discovered that Brown believed the debt was resolved. Vancura, who had not been paid, did not agree, and eventually sued a variety of defendants, including Albear and Kinko’s; Brown and Katris also sued those defendants, along with Boatwright. After a bench trial, the trial court found Kinko’s liable to Vancura, Brown and Katris for violations of the Notary Public Act as well as negligent supervision and training of Albear. Kinko’s appealed both.