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Judge Eyeing Sanctions for Frivolous Lawsuit

HOUSTON (CN) - A salesman defamed his former employer with a frivolous lawsuit that claimed he was fired for refusing to take clients to strip clubs, a federal judge has ruled.

After Sentry Supply Inc. dba Superior Supply & Steel had the retaliation lawsuit filed by its former employee, Michael Vackar, dismissed, the company counterclaimed for defamation.

U.S. District Judge Lee Rosenthal turned to the issue of sanctions earlier this year after finding "the undisputed evidence showed that it did not instruct Vackar to commit a crime or fire him for refusing to do so, and that it fired Vackar because he submitted four fraudulent expense reports for reimbursement."

Vackar meantime stopped complying with court-ordered deadlines after his original attorney withdrew and he tapped Bob Mabry of the Woodlands, Texas, to stand in.

Other Sentry employees who worked with Vackar submitted that said they had never heard a Superior boss tell Vackar to take clients to strip clubs.

Furthermore, Superior produced evidence that it had a longstanding policy banning meetings at strip clubs in place when Vackar had supposedly received his instructions.

In granting counterclaims for fraud and money had and received, Rosenthal noted Vackar "admitted that he submitted false expense reimbursements" for three dinners with potential clients that never happened. At least $925.24 out of the $965.35 for which he received reimbursements by Superior were falsified expenses, according to the Jan. 2 ruling.

The libel and slander claims against Vackar meanwhile pertained in part to media interviews his attorney gave.

"Superior has submitted uncontroverted evidence that at least some of what Vackar's counsel told the media was false," Rosenthal wrote.

"There are no witnesses who support Vackar's version of events, although Vackar, through counsel, stated that there were 'certainly' multiple witnesses to Superior's demand that sales representatives take clients to strip clubs, obtain sexual favors for the clients, and videotape them for blackmail. All the witness affidavits and declarations are to the contrary."

Superior is eligible for nominal damages without showing that Vackar's statements caused pecuniary harm, the court found.

"There is ample evidence showing that Vackar used the media to publicize the filing of his lawsuit and to increase the pressure on Superior," the ruling states.

Rosenthal granted the company summary judgment without deciding whether Vackar made the statements with malice.

If the court determines that the defamatory statements were made with malice, Vackar may owe exemplary damages, according to the ruling.

Rosenthal also sought more evidence on Sentry's business-disparagement claim, demonstrating a difference from its defamation injuries.

It is nevertheless clear that "sanctions are warranted," the judge concluded.

Throughout the proceedings, "Vackar continued to file pleadings containing statements and accusations that the evidence repeatedly failed to support and instead showed were false," she wrote.

This court finds that when Vackar filed his suit, he did so in violation of Rule 13, and that when he continued to file papers accusing Superior employees of such conduct, he did so in violation of Rule 11," the decision also states. "Sanctions are warranted."

Rosenthal heard testimony from witnesses and reviewed exhibits on exemplary damages at a hearing on Feb. 27.

The official transcript of that hearing was filed and will be available to the public on July 22.

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