United States District Court, D. Oregon, Portland Division
AARON C. REED, an individual, Plaintiff,
EZELLE INVESTMENT PROPERTIES INC., doing business as ezelleinvestmentproperties.com, GLENN D. EZELLE JR., an individual, DOES 1-10 INCLUSIVE, Defendants.
OPINION AND ORDER
YIM YOU UNITED STATES MAGISTRATE JUDGE.
Aaron C. Reed (“Reed”) has brought this action
for copyright infringement against defendants Glenn D. Ezelle
Jr. (“Ezelle”) and Ezelle Investment Properties
Inc. (“EIP”) (collectively
“defendants”). Before the court are cross-motions for
summary judgment. For the reasons set forth below, Reed's
motion is granted and defendants' motion is denied.
a professional photographer specializing in the production of
fine-art nature photography. Decl. Aaron C. Reed ¶ 2
(“Reed Decl.”), ECF #26-1. Reed offers his works
through his website in the form of museum quality fine-art
prints. Id. ¶ 3. He sets strict production
limits of between 50 and 200 prints for each work.
Id. ¶ 4. His pieces sell for thousands of
dollars each. Id., Ex. A (displaying invoices of
$12, 000 for four pieces, $4, 250 for two pieces, $4, 800 for
one piece, and $5, 000 for one piece). His customers pay a
premium due to the artificial scarcity of each piece.
Id. ¶¶ 4-5. Reed has expended great time
and effort establishing his brand as a fine-art nature
photographer and is very selective about when and how his
works are used. Id. ¶ 18. While Reed endeavors
to protect his intellectual-property rights to the best of
his ability, he does not have the time or financial resources
to stop the widespread copyright infringement of his
photographs. Id. ¶¶ 7-8.
2010, Reed took a photograph at the Japanese Garden in
Portland, Oregon (“the Image”), and displayed it
on his website. Joint Stip. Undis. Facts ¶ 1, ECF #22;
id., Ex. A (showing a copy of the Image). Reed
registered the Image as part of a group registration of
photographs taken in 2010 and did not assert a claim in the
selection, coordination, or arrangement of the works included
within the group. Id. ¶ 4. On January 30, 2013,
the Copyright Office issued registration certificate number
VAu 1-119-527 for the group of photographs. Id.
is a real estate broker licensed in Oregon and California and
operates a real estate business. Decl. Glenn D. Ezelle Jr.
¶ 1 (“Ezelle Decl.”), ECF #24-2. He is the
sole owner and president of EIP. Joint Stip. Undis. Facts
¶ 7, ECF #22. In 2016, Ezelle searched Google for
“free images” to display on EIP's website and
found the Image. Ezelle Decl. ¶ 2, ECF #24-2. It is
unclear where Ezelle procured the Image. Decl. Ryan E.
Carreon ¶ 4, Ex. B, ECF #35-1. Regardless, Ezelle
maintains that he did not see a watermark or any other
information suggesting the Image was copyrighted, and he
believed he could use the Image for free. Ezelle Decl. ¶
2, ECF #24-2. On September 7, 2016, Ezelle uploaded a copy of
the Image to EIP's website where it was displayed in
rotation with seven other photographs in five-second
intervals at the top of the website's homepage. Joint
Stip. Undis. Facts ¶¶ 9-10, ECF #22; id.,
Ex. C (showing screenshot of EIP website with the Image). The
parties dispute the amount of website traffic the EIP website
received during the relevant period.
2017, Reed discovered the Image on EIP's website and
instructed his attorneys to contact Ezelle to try to resolve
the matter. Reed Decl. ¶¶ 14, 19, ECF #26-1. In
July 2017, through his attorneys, Reed sent Ezelle a
cease-and-desist letter. Ezelle Decl., Ex. A, ECF #24-3. The
communication included a Rapid Conditional Release License
Agreement (“Proposed Settlement Agreement”),
which provided Ezelle the option of immediately settling the
matter for $5, 000. Id. The Proposed Settlement
Agreement contained the following confidentiality clause:
The terms of this Agreement are confidential; provided
however, that each Party may disclose the terms of this
Agreement, as necessary to enforce its terms, in response to
valid legal process or as otherwise required by law, and/or
to its financial advisors and/or legal advisors.
Settlement Agreement ¶ 7, ECF #24-3. It also provided
that the “Agreement may not be modified or amended
except by written agreement, signed by all Parties, ”
and contained a severability clause. Id.
¶¶ 9, 11.
receipt of the letter, Ezelle immediately removed the Image
from EIP's website and retained counsel. Ezelle Decl.,
Ex. D at 31, ECF #24-6. Several days later, Ezelle's
counsel sent Reed's counsel an email, sparking
negotiations via email that lasted a little under a month.
Id. In two emails sent in late July 2017,
Ezelle's counsel stated his belief that Reed had seeded
the internet with his photographs with the intent of later
bringing dubious legal claims. Higbee Decl. ¶¶
12-14 & Ex. B, ECF #26-1. Ezelle's counsel also
stated that he was writing an article about these practices
in a legal magazine, and made several disparaging comments on
online forums. Id. ¶¶ 9-10 & Ex. B, E.
Nevertheless, to quickly resolve the matter without the
expense of litigation, the parties made several attempts to
settle the dispute. Reed Decl. ¶ 20, ECF #26-1; Ezelle
Decl. ¶¶ 8-9, ECF #24-2.
August 11, 2017, Ezelle's counsel sent an email to
Reed's counsel stating that “[a]t this juncture, we
intend to do as previously mentioned, but in the amount of
$1000. We are not making a settlement offer in this
amount, although you are welcome to accept it. We are
going to send a check, payable to Mr. Reed in the amount of
$1000.” Ezelle Decl., Ex. D at 7, ECF #24-6 (emphasis
added). Reed's counsel responded, “I have conveyed
the $1000 offer to my client which he accepted. Please see
attached the release agreement for your review. Please sign
it and return it . . . .” Id. Ezelle returned
the Proposed Settlement Agreement, but with lines drawn
through the agreement's confidentiality clause. Ezelle
Decl., Ex. C, ECF #24-5; id., Ex. D at 6-8, ECF
#24-6. In response to inquiries from Reed's counsel
regarding the modification of the agreement, Ezelle's
counsel's said, “If the deletions are unacceptable,
you can return the check to me.” Ezelle Decl., Ex. D at
7, ECF #24-6. Through counsel, Reed responded that the
confidentiality clause was non-negotiable and demanded $20,
000 to settle the case. Reed Decl. ¶ 28, ECF #26-1;
Ezelle Decl., Ex. D at 4, ECF #24-6. In a later email,
Ezelle's counsel stated that “[t]he only thing we
did not agree on was the confidentiality clause demanded by
your office.” Ezelle Decl., Ex. D at 2, ECF #24-6.
negotiations fell through, Ezelle's counsel made what
Reed considered additional disparaging comments on online
forums characterizing Reed's efforts as “an
‘extrajudicial business model' driven by dishonest
representation[s] . . . .” Higbee Decl., Ex. E, ECF
#26-1; Reed Decl. ¶ 24, ECF #26-1. Reed considered the
confidentiality clause to be non-negotiable, because he might
otherwise suffer reputational harm from Ezelle's
counsel's disparaging comments about his attempts to
protect his intellectual property. Higbee Decl. ¶ 11
& Ex. D, ECF #26-1; Reed Decl. ¶¶ 23, 26, ECF
#26-1; Decl. Naomi M. Sarega ¶ 7, ECF #26-1. Indeed,
“Reed felt that he would not be able to fully combat
any negative statements made by Defendants' counsel . . .
without procuring a favorable judgment on the merits . . .
.” Higbee Decl. ¶ 14, ECF #26-1; see also
Reed Decl. ¶ 24, ECF #26-1. Reed then filed suit.
is entitled to summary judgment if the “movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
FRCP 56(a). The moving party has the burden of establishing
the absence of a genuine dispute of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
“When judging the evidence at the summary judgment
stage, the district court is not to make credibility
determinations or weigh conflicting evidence, and is required
to draw all inferences in a light most favorable to the
nonmoving party.” Musick v. Burke, 913 F.2d
1390, 1394 (9th Cir. 1990); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986) (“The
evidence of the nonmovant is to be believed, and all
justifiable inferences are to be drawn in his favor.”).
However, the “mere existence of a scintilla of evidence
in support of the plaintiff's position [is] insufficient
. . . .” Id. at 252. “Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no genuine issue for
trial.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (citation and quotation
seeks a ruling that defendants infringed his copyright of the
Image and an award of $15, 375 in statutory damages, $9, 825
in attorneys' fees, and $400 in costs. Pl.'s Mot.
Summ. J. 6, ECF #26. Defendants contend that the parties
entered into an enforceable settlement agreement, and
alternatively argue that if such an agreement did not exist,
they are innocent and not willful copyright infringers.
Defs.' Mot. Summ. J. 3, ECF #24.
Enforceability of Proposed Settlement Agreement
court first considers defendants' contention that the
parties entered into an enforceable settlement agreement.
Mirror Image Rule
Oregon law, whether a contract exists is a question of law.
Wieck v. Hostetter, 274 Or.App. 457, 471 (2015). A
“contract is most commonly formed by an offer, an
acceptance of that offer, and an exchange of
consideration.” Moro v. State of Oregon, 357
Or. 167, 196 (2015). “Oregon applies an objective
theory of contracts.” Wieck, 274 Or.App. at
471. That is, the existence and terms of a contract are
determined by the evidence of the parties' communications
and acts, not their subjective understandings. Rhoades v.
Beck, 260 Or.App. 569, 572 (2014).
follows the mirror image rule of offer and acceptance.
Arboireau v. Adidas-Salomon AG, 347 F.3d 1158, 1163
(9th Cir. 2003). “In Oregon, it is settled that the
acceptance of an offer must correspond to the offer at every
point, leaving nothing open for future negotiations.”
Id. (internal quotation and alterations omitted).
“The acceptance must be positive, unconditional,
unequivocal, and unambiguous, and must not change, add to, or
qualify the terms of the offer.” C. R. Shaw
Wholesale Co. v. Hackbarth, 102 Or. 80, 94 (1921).
“Where the offeree . . . makes a counter offer or
conditional acceptance which amounts to a counter offer, or
makes an attempted acceptance which seeks to modify one or
more of the terms of the offer, this operates as a rejection
of the original offer.” Id. at 95-96. Before
the counteroffer can become a contract, it must be accepted
by the party who made the original offer. Id. at 96;
see also Restatement (Second) of Contracts § 59
(“a reply to an offer which purports to accept but is .
. . different from those offered is not an acceptance but is
there is no binding settlement agreement because Ezelle's
purported acceptance modified a material term of the
agreement and thus constituted a counteroffer. Reed's
first email to Ezelle included a copy of the Proposed
Settlement Agreement, which contained the confidentiality
clause at issue. Ezelle Decl., Ex. A., ECF #24-3. The parties
negotiated the settlement amount for the next several weeks.
Id., Ex. D at 8-32, ECF #24-6. Ezelle proposed a
settlement amount of $1, 000, and Reed sent Ezelle another
copy of the Proposed Settlement Agreement to be signed and
returned with payment. Ezelle Decl., Ex. D at 7, ECF #24-6.
Ezelle mailed a $1, 000 check to Reed with a signed copy of
the Proposed Settlement Agreement, but with the
confidentiality provision crossed out. Id., Ex. C,
ECF #24-5; id., Ex. D ...