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Langley v. Canadream Corp.

United States District Court, D. Colorado

July 23, 2019

JASON LANGLEY, Plaintiff,
v.
CANADREAM CORPORATION, Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO ENFORCE SETTLEMENT AND DENYING PLAINTIFF'S MOTION TO DISMISS COUNTERCLAIMS

          WILLIAM J. MARTINEZ UNITED STATES DISTRICT JUDGE

         This is a copyright infringement lawsuit. Plaintiff Jason Langley (“Langley”), a professional photographer, sues CanaDream Corporation (“CanaDream”), an RV rental company, for using one of Langley's copyrighted photographs on a CanaDream website without Langley's permission. (See generally ECF No. 1.) Currently before the Court are two motions:

• Langley's Motion to Dismiss (ECF No. 18), seeking to dismiss CanaDream's counterclaims; and
• CanaDream's Motion to Enforce Settlement Agreement, or, in the Alternative, Set Early Neutral Evaluation (“Motion to Enforce Settlement”) (ECF No. 37).

         Because the Motion to Enforce Settlement could moot the Motion to Dismiss, the Court will address it first. For the reasons explained below, the Court finds that the parties never entered into a sufficiently definite settlement, and so the Motion to Enforce Settlement will be denied. CanaDream's alternative request for an order directing the parties to attend an early neutral evaluation will also be denied as futile in the present circumstances. As for the Motion to Dismiss, it is filed under Federal Rule of Civil Procedure 12(b)(6), but its arguments are patently not Rule 12(b)(6) arguments, and so are frivolous. For that reason, the Motion to Dismiss will also be denied and Langley's counsel will be admonished.

         I. MOTION TO ENFORCE SETTLEMENT (ECF No. 37)

         A. Legal Standard

          “A trial court has the power to summarily enforce a settlement agreement entered into by the litigants while the litigation is pending before it.” Shoels v. Klebold, 375 F.3d 1054, 1060 (10th Cir. 2004) (internal quotation marks omitted). Because settlement agreements are contracts, “[i]ssues involving the formation and construction of a purported settlement agreement are resolved by applying state contract law.” Id. at 1060. This is true “even when there are federal causes of action in the underlying litigation.” Gates Corp. v. Bando Chem. Indus., Ltd., 4 Fed.Appx. 676');">4 Fed.Appx. 676, 682 (10th Cir. 2001).

         Colorado public and judicial policies favor voluntary agreements to settle legal disputes. See Colo. Ins. Guar. Ass'n v. Harris, 827 P.2d 1139, 1142 (Colo. 1992). However, a court may enforce a settlement agreement only if it constitutes an enforceable contract. See H.W. Houston Constr. Co. v. District Court, 632 P.2d 563, 565 (Colo. 1981). In Colorado, “[i]n order for a settlement to be binding and enforceable, there must be a ‘meeting of the minds' as to the terms and conditions of the compromise and settlement.” Id. “[T]he evidence must show that the parties agreed upon all essential terms.” I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882, 888 (Colo. 1986). Stated somewhat differently, “[t]o have an enforceable contract it must appear that further negotiations are not required to work out important and essential terms.” New York Life Ins. Co. v. K N Energy, Inc., 80 F.3d 405, 409 (10th Cir. 1996) (citing Am. Mining Co. v. Himrod-Kimball Mines, Co., 235 P.2d 804, 807-08 (Colo. 1951)).

         B. Background

         1. Allegations of the Complaint

         In September 2007, Langley took a high-quality photograph of Bear Lake in Rocky Mountain National Park. (¶ 8;[1] see also ECF No. 1 at 6.)[2] Later that same month, Langley posted the photo for others to view on www.seekingfocus.com. (¶ 9; see also ECF No. 1 at 7.) Langley does not explain the purpose of this website, which now appears defunct. Langley registered the Bear Lake photograph with the United States Copyright Office in June 2011. (¶ 10.)

         CanaDream is an Alberta-based company that rents RVs, including through an office in Aurora, Colorado. (¶ 2.) Beginning in September 2015 and continuing at least through June 2018, CanaDream used the Bear Lake photograph on one of its websites, www.ameridream-rv.com (also now defunct), to advertise a suggested RV vacation itinerary through Colorado and Wyoming. (¶¶ 11-12; see also ECF No. 1 at 9.) CanaDream did not have Langley's permission to use the photograph. (¶ 16.)

         2. Procedural History & Settlement Negotiations

         Langley filed this lawsuit on June 26, 2018. (ECF No. 1.) On October 25, 2018, he moved for an extension of time to complete service of process, explaining that his counsel, Mr. David Deal, had mailed waiver-of-service packets but they had been “returned marked ‘refused, '” and so, as of late August 2018, Mr. Deal was relying on the assistance of the Canadian government to serve process. (ECF No. 11 at 1-2.) As of that time, Mr. Deal had “not received confirmation of service.” (Id. at 2.) The magistrate judge granted this motion, extending Langley's service deadline to December 21, 2018. (ECF No. 13.)

         Sometime before December 18, 2018-and still before Mr. Deal had received word from the Canadian government about service of process-CanaDream retained Colorado counsel, Mr. James Juo, who sent a letter to Mr. Deal claiming that any alleged infringement had been innocent and that the accused image had been removed from the website as of October 5, 2016, well before June 2018 (as alleged in the complaint). (ECF No. 17 at 9, ¶ 31.)

         The following day (December 19), Mr. Deal and Mr. Juo had a telephone conversation to discuss possible settlement. (Id. ¶ 33; ECF No. 18 at 2-3.) Mr. Deal claims that, during that telephone call, Mr. Juo would neither confirm nor deny whether CanaDream had been served with process. (Id.) Mr. Deal also agreed with Mr. Juo that the complaint's assertion that the infringing photograph had been on CanaDream's website as of June 2018 was a mistake and would be corrected by amendment, if needed. (Id. at 3.)[3]

         On December 20, 2018, Mr. Juo e-mailed Mr. Deal to follow up on the previous day's telephone conversation. (ECF No. 37-1 at 5-6.)[4] Mr. Juo provided some factual rebuttal to what the parties had discussed and concluded as follows: “The documents show that CanaDream removed the accused image a month BEFORE receiving any communication from you. I have seen nothing to the contrary. You should take this into consideration for any settlement counteroffer Mr. Langley may propose.” (Id. at 6 (capitalization in original).) Mr. Juo's mention of a forthcoming counteroffer from Langley implies that CanaDream had made an offer, but the parties do not say what it was. In any event, Mr. Deal replied later that day and expressed skepticism that the timing of CanaDream's removal of the accused image would “make[] a difference in the issue of statutory damages” (id. at 5), apparently referring to 17 U.S.C. § 504(c). Mr. Deal nonetheless conveyed a settlement offer (or counteroffer) as follows:

In the interest of the parties not expending additional resources, Mr. Langley will agree to settle the matter for $2, 900.00, which includes $2, 250.00 (3x minimum statutory damages) plus $400.00 filing fee and $250.00 in service costs.
If we remain in disagreement, Mr. Langley will choose to proceed through at least the discovery stage.

(Id.)

         Mr. Juo responded to this offer on December 27, 2018. (Id. at 3-4.) After again arguing what he believed to be CanaDream's strengths on the merits of the case, he addressed the settlement offer as follows: “Nonetheless, to avoid incurring litigation expenses in this low-value case, CanaDream counter-offers $1400, which represents $750 (minimum statutory damages) plus the ‘costs' of $650 outlined in your prior email.” (Id. at 4 (underscoring in original).) Later that same day, Mr. Deal replied, “Thank you for the email. I have discussed this case at length with my client (mostly during the months your client was busy avoiding service). His offer of $2, 900.00 is firm. If this means we are forced to try the case, so be it.” (Id. at 3.)

         In the late morning of January 8, 2019, Langley filed a return of service from the Canadian authorities showing that CanaDream had been served with process on November 2, 2018. (ECF No. 14.) In the mid-afternoon of January 8, Mr. Juo continued the settlement e-mail thread by announcing that

         CanaDream is willing to pay $2900 in exchange for:

• a dismissal with prejudice of the present action;
• a release of CanaDream and every parent company or subsidiary of CanaDream, and each of their respective current and former officers, directors, shareholders, employees, agents, distributors, and customers, with regards to any claims arising from any of the acts, actions, or transactions which are or which could have been asserted against Frictionless World, [5] whether known or unknown, ...

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