In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 15‐2088 and 15‐3658
WINE & CANVAS DEVELOPMENT, LLC, ANTHONY SCOTT,
TAMARA MCCRACKEN, AND DONALD MCCRACKEN,
Plaintiffs‐Appellants,
v.
CHRISTOPHER MUYLLE, THEODORE WEISSER, YN CANVAS LLC
D/B/A ART UNCORKED, ART UNCORKED, LLC, AND WEISSER
MANAGEMENT GROUP, LLC,
Defendants‐Appellees.
____________________
Appeals from the United States District Court for
the Southern District of Indiana, Indianapolis Division.
No. 11‐cv‐01598 — Tanya Walton Pratt, Judge.
____________________
ARGUED NOVEMBER 9, 2016 — DECIDED AUGUST 17, 2017
____________________
Before BAUER and KANNE, Circuit Judges, and FEINERMAN,
District Judge.*
* Of the Northern District of Illinois, sitting by designation.
2 No. 15‐2088
FEINERMAN, District Judge. Wine and Canvas Develop‐
ment, LLC, Anthony Scott, Tamara McCracken, and Donald
McCracken sued Christopher Muylle, Theodore Weisser, YN
Canvas CA, LLC, Art Uncorked LLC, and Weisser Manage‐
ment Group LLC, bringing federal trademark and state law
claims. Muylle brought several counterclaims, including one
for abuse of process under Indiana law. Weisser defaulted,
and it appears that Weisser and Muylle were the only mem‐
bers of the defendant LLCs, so practically speaking the case
ultimately amounted to Plaintiffs against Muylle. Pretrial
motions disposed of much of the case, and the jury found for
Muylle on Plaintiffs’ trademark infringement and false des‐
ignation of origin claims and on Muylle’s abuse of process
counterclaim. Plaintiffs appeal, and we affirm.
I. Background
Wine & Canvas is a business that specializes in hosting
events colloquially known as “painting nights.” These are
social evenings where patrons, following a teacher’s instruc‐
tions, create a painting while enjoying wine and other adult
beverages. Wine & Canvas operated locations in Indianapo‐
lis, Bloomington, and Oklahoma City.
In 2008, Muylle befriended Scott, who was already ac‐
quainted with Weisser. They discussed a franchise arrange‐
ment under which Muylle and Weisser would move from
Indiana to San Francisco to open a Wine & Canvas operation
there. Muylle and Weisser signed a license agreement on be‐
half of their entity, YN Canvas CA, LLC.
On August 10, 2011, Muylle and Weisser launched their
Wine & Canvas location in San Francisco. Tamara McCrack‐
en and Scott were present at the launch, and McCracken
No. 15‐2088 3
taught the first class that day. McCracken also worked with
Muylle and Weisser to approve paintings they would use at
their events. Plaintiffs lent additional support by giving
company email addresses to Muylle and Weisser and by ad‐
vertising the San Francisco operation on the Wine & Canvas
website.
Disagreements soon arose over how the San Francisco
operation would be structured and what degree of owner‐
ship Plaintiffs would hold. These disagreements continued
without resolution. Finally, on November 18, 2011, Muylle
and Weisser gave notice that they were terminating the li‐
cense agreement. At that point, they changed the name of
the business to “Art Uncorked” and ceased using the Wine &
Canvas name or other marks.
On November 28, 2011, Plaintiffs filed a complaint in In‐
diana state court alleging trademark infringement under the
Lanham Act, 15 U.S.C. § 1051 et seq., and other claims. De‐
fendants timely removed the suit to federal court, and
Muylle answered and filed several counterclaims. His initial
counterclaims invoked California franchise law, but he later
added federal trademark cancellation and Indiana law abuse
of process counterclaims.
From the beginning, the proceedings were slow‐moving,
principally due to the conduct of Plaintiffs and their attor‐
neys. Plaintiffs failed to serve written discovery responses on
their initial due date, March 20, 2013. They then failed to
meet the extended deadline of May 1, 2013, leading Muylle
to file a motion to compel, which was granted. After Plain‐
tiffs failed to respond by early June, the district court im‐
posed sanctions and ordered them to serve their responses
by June 14, 2013, a deadline that later was extended to June
4 No. 15‐2088
17. Plaintiffs served woefully incomplete responses on June
17 at 11:55 p.m., and “final” responses at 4:10 a.m. the next
day. Muylle asserted that the “final” responses were not only
late, but also incomplete because they did not itemize Plain‐
tiffs’ damages, and he moved for further sanctions. Citing
the responses’ tardiness and also their incompleteness, the
magistrate judge recommended sanctions in the amount of
$2,156, the costs to Muylle of filing the sanctions motion, and
the district court adopted the recommendation. By the end
of the case, Plaintiffs had been sanctioned three times. Sum‐
marizing their conduct, the district court observed that they
had “flooded the Court with filings … and … filed numer‐
ous claims that the court has found to be without merit.”
2014 WL 4053928, at *15 (S.D. Ind. Aug. 15, 2014).
Meanwhile, the district court dismissed the California
franchise law counterclaims, and both sides then moved for
summary judgment. The court granted Plaintiffs summary
judgment on Muylle’s trademark cancellation counterclaim,
but his abuse of process counterclaim survived. The court
granted summary judgment to Muylle on most of Plaintiffs’
claims, including trademark dilution, sale of counterfeit
items, unfair competition, bad faith, tortious conduct, abuse
of process, breach of contract, fraud, and a claim for com‐
pensation under the Indiana Crime Victims Act. The court
also granted partial summary judgment to Muylle on Plain‐
tiffs’ trademark infringement claim, finding that for any use
through November 18, 2011, Plaintiffs had impliedly con‐
sented to Muylle’s using the marks.
Only three claims proceeded to trial: Plaintiffs’ claims of
trademark infringement and false designation of origin (for
any use of the marks after November 18, 2011), and Muylle’s
No. 15‐2088 5
abuse of process counterclaim. The jury returned a verdict
for Muylle on all counts, rejecting Plaintiffs’ claims and
awarding Muylle $ 270,000 on his counterclaim. After Plain‐
tiffs filed their appeal, the district court granted Muylle’s
motion for fees under the Lanham Act, awarding
$ 175,882.68.
II. Discussion
Plaintiffs challenge fourteen rulings by the district court.
Many of those challenges are wholly unsupported by devel‐
oped argument citing the record and supporting authority,
and are thus forfeited. See Long‐Gang Lin v. Holder, 630 F.3d
536, 543 (7th Cir. 2010); Ajayi v. Aramark Business Serv’s, Inc.,
336 F.3d 520, 529 (7th Cir. 2003) (noting that an appellant
must “identify the legal issue, raise it in the argument sec‐
tion of her brief, and support her argument with pertinent
authority”). Other issues, though properly presented, are
plainly meritless and need not be addressed. Only the fol‐
lowing issues warrant discussion.
A. Sanctions Order for Tardy Discovery Responses
Plaintiffs contend that the district court erred in sanction‐
ing them $ 2,156 in connection with their June 2013 discov‐
ery responses, which were tardy and failed to provide a
damages itemization. They argue that the sanctions award is
fatally inconsistent with a later ruling in which the court de‐
nied additional sanctions for Plaintiffs’ failing to provide the
same itemization; the court denied those sanctions on the
ground that Muylle had not produced the financial records
necessary for Plaintiffs to itemize their damages. In Plain‐
tiffs’ view, when the district court agreed that Muylle’s fail‐
ure to produce records prevented them from preparing an
6 No. 15‐2088
itemization, it undermined the basis for the earlier sanctions
award.
We review a trial court’s imposition of discovery sanc‐
tions for abuse of discretion. See Scott v. Chuhak & Tecson,
P.C., 725 F.3d 772, 778 (7th Cir. 2013); Maynard v. Nygren, 332
F.3d 462, 467 (7th Cir. 2003). “Under this standard, we up‐
hold any exercise of the district court’s discretion that could
be considered reasonable, even if we might have resolved
the question differently.” Maynard, 332 F.3d at 467. “A party
meets its burden under this standard only when it is clear
that no reasonable person would agree with the trial court’s
assessment of what sanctions are appropriate.” Scott, 725
F.3d at 778 (internal quotation marks and alteration omitted).
The district court did not abuse its discretion. As the
magistrate judge explained, sanctions were warranted be‐
cause Plaintiffs’ discovery responses were late, albeit by one
day. Sanctions for missing a deadline by one day certainly
are not mandatory, but neither are they prohibited given the
wide latitude district courts have in such matters. See Flint v.
City of Belvidere, 791 F.3d 764, 768 (7th Cir. 2015) (“[C]ase
management depends on enforceable deadlines … . In man‐
aging their caseloads, district courts are entitled to—indeed
they must—enforce deadlines.”) (internal quotation marks
omitted); Raymond v. Ameritech Corp., 442 F.3d 600, 605 (7th
Cir. 2006) (“Rule 6(b) … clearly gives courts both the authori‐
ty to establish deadlines and the discretion to enforce
them.”); Shine v. Owens‐Ill., Inc., 979 F.2d 93, 96 (7th Cir. 1992)
(“[J]udges must be able to enforce deadlines.”) (internal quo‐
tation marks omitted). Of course, sanctions must be reasona‐
ble, and a heavy sanction such as dismissal or an outsized
monetary award might be unwarranted in response to minor
No. 15‐2088 7
tardiness. See FM Indus. v. Citicorp Credit Servs., Inc., 614 F.3d
335, 339 (7th Cir. 2010) (holding unreasonable an $815 mil‐
lion sanctions request for missing a discovery deadline by
one day). But the sanctions here were reasonable, consisting
solely of the costs Muylle incurred related to the sanctions
motion. Thus, even though the district court later held Plain‐
tiffs’ failure to itemize their damages to be reasonable, the
untimeliness of the June 2013 discovery responses provided
a legitimate, independent ground for sanctions. This is par‐
ticularly so given Plaintiffs’ dilatory conduct prior to the
sanctions order; they had already missed multiple discovery
deadlines, causing Muylle to file a motion to compel, and
they had been sanctioned once before. Against this back‐
drop, it was not unreasonable for the district court to con‐
clude that even a single day’s tardiness required some sanc‐
tion to deter future misbehavior.
B. Implied Consent to Use the Wine & Canvas Marks
In moving for summary judgment on Plaintiffs’ trade‐
mark infringement claim, Muylle contended that from Au‐
gust 2011 through November 18, 2011, Plaintiffs had granted
him implied consent to use their marks. Citing Bobak Sausage
Co. v. A & J Seven Bridges, Inc., 805 F. Supp. 2d 503 (N.D. Ill.
2011), Plaintiffs responded that to show implied consent,
Muylle had to demonstrate that: “(1) the senior user actively
represented it would not assert a right or claim; (2) the delay
between the active representation and the assertion of the
right or claim was not excusable; and (3) the delay caused
the defendant undue prejudice.” Id. at 512–13. The district
court disagreed, reasoning that the Seventh Circuit had not
adopted the second and third requirements. 2014 WL
4053928, at *8. And finding that Plaintiffs’ conduct—such as
8 No. 15‐2088
aiding Muylle in establishing and operating the Wine &
Canvas location in San Francisco—constituted an active rep‐
resentation that they would not assert a claim, the district
court held that Muylle had established implied consent and
thus granted summary judgment for all trademark in‐
fringement claims based on his use of the marks from Au‐
gust 2011 to November 18, 2011. Ibid.
Two years after the district court ruled, in Hyson USA,
Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 941 (7th Cir. 2016), we
adopted the three‐part test that Plaintiffs had proposed to
the district court in this case. The district court’s understand‐
able failure to anticipate Hyson is of no moment, however, as
Muylle was entitled to summary judgment on implied con‐
sent even under the correct standard.
As noted, it was clear around the time of Muylle’s August
2011 launch in San Francisco that the parties disagreed over
the new location’s ownership structure. At that point, it
would have been perfectly reasonable for Plaintiffs to re‐
quire Muylle to cease using the Wine & Canvas marks until
the disputes were resolved. Instead, Plaintiffs allowed
Muylle to continue using the marks for months. That delay
is inexcusable, satisfying the second part of the three‐part
test. As to the third, undue prejudice, given that Muylle
moved across the country to start the San Francisco opera‐
tion and stayed there to operate it, Plaintiffs’ failure to
promptly assert their rights prejudiced him. Accordingly,
summary judgment would have been appropriate on the
implied consent issue even had the district court applied the
Hyson framework.
No. 15‐2088 9
C. Testimony Regarding Settlement Negotiations
Plaintiffs challenge the district court’s admission of testi‐
mony concerning a statement that Scott made to Muylle dur‐
ing the parties’ September 2012 settlement discussions re‐
garding Plaintiffs’ trademark claims. Specifically, Scott said
that his goal was to “close [Muylle’s] door[] or [Scott’s] ass‐
hole attorney would close [it] for [him].” Plaintiffs argue that
testimony regarding the statement was inadmissible under
Federal Rule of Evidence 408.
“This court reviews a district court’s interpretation of the
Federal Rules of Evidence de novo but the district court’s de‐
cision to admit evidence for abuse of discretion.” United
States v. Turner, 836 F.3d 849, 857 (7th Cir. 2016). Rule 408
provides in pertinent part:
(a) Prohibited Uses. Evidence of the following is not
admissible—on behalf of any party—either to prove
or disprove the validity or amount of a disputed claim
or to impeach by a prior inconsistent statement or a
contradiction:
(1) furnishing, promising, or offering—or accept‐
ing, promising to accept, or offering to accept—a
valuable consideration in compromising or at‐
tempting to compromise the claim; and
(2) conduct or a statement made during compro‐
mise negotiations about the claim—except when
offered in a criminal case and when the negotia‐
tions related to a claim by a public office in the ex‐
ercise of its regulatory, investigative, or enforce‐
ment authority.
10 No. 15‐2088
Although statements made in settlement negotiations are
inadmissible to prove liability on the underlying claim, they
may be admissible for other purposes, including “to show
the defendant’s … intent.” Bankcard Am., Inc. v. Universal
Bancard Sys., 203 F.3d 477, 484 (7th Cir. 2000).
That is precisely what Muylle did here. Scott’s statement,
made in the context of settlement negotiations concerning
Plaintiff’s claims against Muylle, were not offered to disprove
liability on those claims, but rather to show Plaintiffs’ improp‐
er intent and ulterior motive in filing their lawsuit for the
purpose of proving Muylle’s abuse of process counterclaim.
See Watson v. Auto Advisors, Inc., 822 N.E.2d 1017, 1029 (Ind.
App. 2005) (“Abuse of process has two elements: (1) ulterior
purpose or motives; and (2) a willful act in the use of process
not proper in the regular conduct of the proceeding.”) (in‐
ternal quotation marks omitted). Under these circumstances,
the testimony was not inadmissible.
This conclusion follows from the text of Rule 408. Para‐
graph (a) uses the term “a disputed claim,” not “disputed
claims” or “any claims.” Subparagraphs (1) and (2) of para‐
graph (a) likewise speak of “the” claim. The Rule’s use of the
singular term “claim” suggests that settlement discussions
concerning a specific claim are excluded from evidence to
prove liability on that claim, not on others. That is, when a
settlement discussion concerns Claim A, and statements
from that discussion are later offered to prove or disprove
liability on Claim B, Rule 408(a) does not make those state‐
ments inadmissible. We do not expect such circumstances to
arise very often, as settlement discussions usually encom‐
pass multiple claims all at once. Here, however, there is no
possibility that the settlement discussion, which occurred in
No. 15‐2088 11
September 2012, addressed Muylle’s abuse of process claim,
which was not filed until months later.
D. Summary Judgment on the Unfair Competition
Claim
Plaintiffs challenge the district court’s grant of summary
judgment to Muylle on their state law unfair competition
claim. Muylle’s summary judgment motion argued that
Plaintiffs had presented no evidence showing a likelihood of
confusion between Muylle’s marks and those belonging to
Plaintiffs. The district court held that Plaintiffs failed to ad‐
dress that argument in the section of their opposition brief
addressing the state law unfair competition claim and, citing
Palmer v. Marion County, 327 F.3d 588, 597 (7th Cir. 2003),
considered the claim abandoned. 2014 WL 4053928, at *13.
That holding was in error, as Plaintiffs’ argument on
their state law unfair competition claim incorporated by ref‐
erence their discussion of likelihood of confusion from the
section of their brief addressing their Lanham Act trademark
infringement claim. Indeed, the district court analyzed
whether Plaintiffs had adduced sufficient evidence of likeli‐
hood of confusion in denying summary judgment to Muylle
on the trademark infringement claim for the period follow‐
ing November 18, 2011. Id. at *9–11. Thus, the district court
should not have granted summary judgment to Muylle on
Plaintiffs’ unfair competition claim.
Still, Plaintiffs are not entitled to reversal. The Lanham
Act trademark infringement claim for the period following
November 18, 2011 went to the jury and the jury found for
Muylle. This matters because analysis of trademark in‐
fringement is essentially the same as analysis of Indiana un‐
12 No. 15‐2088
fair competition claims where, as here, the state law claim
rests on trademark infringement. See Fortres Grand Corp. v.
Warner Bros. Entm’t, Inc., 763 F.3d 696, 700 n.4 (7th Cir. 2014)
(“[A]ll relevant authority we have found analyzes Indiana
unfair competition claims based on trademarks the same as
Lanham Act trademark claims, so we analyze all the claims
together.”). Thus, if the unfair competition claim had been
tried, the jury would have rejected it along with the federal
trademark infringement claim. See Am. Cas. Co. of Reading,
Pa. v. B. Cianciolo, Inc., 987 F.2d 1302, 1306 (7th Cir. 1993)
(“Appellate courts should be slow to impute to juries a dis‐
regard of their duties, which implies that we should do what
we can to save the verdict against the specter of inconsisten‐
cy.”) (internal quotation marks and citation omitted). It fol‐
lows that there would be no point to reversing the grant of
summary judgment on the unfair competition claim and re‐
manding for trial.
E. Lanham Act Attorney Fee Award
The district court awarded attorney fees to Muylle under
the Lanham Act. 2015 WL 5513461 (S.D. Ind. Sept. 15, 2015).
Plaintiffs seek reversal of that award on the ground that the
award was entered after they had filed their notice of appeal.
As a general rule, once a notice of appeal is filed, jurisdiction
lies in the appeals court and not in the district court. See
Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58
(1982); United States v. Ali, 619 F.3d 713, 722 (7th Cir. 2010).
There are several exceptions to this rule, however, and we
have unequivocally held that those exceptions include mo‐
tions for attorney fees. See Terket v. Lund, 623 F.2d 29, 33 (7th
Cir. 1980) (holding that a district court may award fees while
the merits of a case are on appeal); see also Kusay v. United
No. 15‐2088 13
States, 62 F.3d 192, 194 (7th Cir. 1995) (applying Terket to a
non‐fee issue that was not an “aspect[] of the case involved
in the appeal”).
The district court’s order denying Plaintiffs’ motion to re‐
consider the attorney fee order cited Terket and Kusay to
support its exercise of jurisdiction over Muylle’s motion.
2015 WL 6554641, at *3 (S.D. Ind. Oct. 28, 2015). On appeal,
Plaintiffs cite Kusay for the proposition that filing a notice of
appeal divests the trial court of jurisdiction, but they inexpli‐
cably fail to acknowledge that Kusay describes the exception
to the rule invoked by the district court. Nor do Plaintiffs at‐
tempt to distinguish Kusay and Terket or argue that they
were wrongly decided. This follows an unfortunate pattern
in this litigation; as the district court noted, Plaintiffs “filed
many motions to reconsider numerous court orders simply
to reargue unaccepted arguments.” 2015 WL 5513461, at *2.
While a party may argue in good faith for the inapplicability,
modification, or reversal of existing authority, it nonetheless
has a duty to acknowledge and grapple with such authority.
Pretending the authority does not exist in hopes that the
court will overlook it is never the appropriate course.
III. Conclusion
For the foregoing reasons, the district court’s judgment is
AFFIRMED.