222 F.R.D. 362 (D.Minn. 2004), Civ. 01-1980(DSD/SRN), Rottlund Co., Inc. v. Pinnacle Corp.

Docket NºCiv. 01-1980(DSD/SRN).
Citation222 F.R.D. 362
Opinion JudgeNELSON, United States Magistrate Judge.
Party NameTHE ROTTLUND COMPANY, INC. d/b/a/ Rottlund Homes, a Minnesota Corporation, Plaintiff, v. PINNACLE CORPORATION d/b/a/ Town & Country Homes, an Illinois Corporation, and Town & Country Homes, Inc., a Minnesota Corporation, Bloodgood Sharp Buster Architects and Planners of Iowa, Inc., an Iowa Corporation, and The Bloodgood Group, Inc., an Iowa Corpora
AttorneyCraig S. Krummen, David Davenport, St. Paul, MN, for Plaintiff. Darren B. Schwiebert, Minneapolis, MN, for Defendant Town & Country Homes, Inc. Christopher Murdoch, Chicago, IL, for Defendant Pinnacle Corp. Holly J. Newman, Minneapolis, MN, for Defendant Bloodgood Sharp Buster and The Bloodgood G...
Case DateJune 30, 2004
CourtUnited States District Courts, 8th Circuit, District of Minnesota

Page 362

222 F.R.D. 362 (D.Minn. 2004)

THE ROTTLUND COMPANY, INC. d/b/a/ Rottlund Homes, a Minnesota Corporation, Plaintiff,

v.

PINNACLE CORPORATION d/b/a/ Town & Country Homes, an Illinois Corporation, and Town & Country Homes, Inc., a Minnesota Corporation, Bloodgood Sharp Buster Architects and Planners of Iowa, Inc., an Iowa Corporation, and The Bloodgood Group, Inc., an Iowa Corporation, Defendants,

and

Town & Country Homes, Inc., a Minnesota Corporation, Third-Party Plaintiff,

v.

Bloodgood Sharp Buster Architects & Planners of Iowa, Inc., an Iowa Corporation, Third-Party Defendant.

Civ. No. 01-1980(DSD/SRN).

United States District Court, D. Minnesota.

June 30, 2004

Page 363

Craig S. Krummen, David Davenport, St. Paul, MN, for Plaintiff.

Darren B. Schwiebert, Minneapolis, MN, for Defendant Town & Country Homes, Inc.

Christopher Murdoch, Chicago, IL, for Defendant Pinnacle Corp.

Holly J. Newman, Minneapolis, MN, for Defendant Bloodgood Sharp Buster and The Bloodgood Group, Inc.

ORDER

NELSON, United States Magistrate Judge.

The above-entitled matter came before the undersigned United States Magistrate Judge on Plaintiff's Motion for Sanctions Pursuant to the Court's Inherent Power, 28 U.S.C. § 1927, Federal Rules of Civil Procedure 11, 26, and 37 (Doc. Nos. 320, 321, 322). This matter has been referred to the undersigned for resolution of pretrial matters pursuant to 28 U.S.C. § 636 and Local Rule 72.1.

I. BACKGROUND

This is in large measure a copyright infringement case. Plaintiff The Rottlund Company (Rottlund) owns copyrights on architectural design plans and architectural works-covering certain townhome technical drawings and as-built works. Rottlund has brought several copyright infringement claims against Defendants Pinnacle Corporation d/b/a Town & Country Homes (Pinnacle), Town & Country Homes of Minnesota (TCM), Bloodgood Sharp Buster (BSB), and the Bloodgood Group, Inc. Rottlund, Pinnacle, and TCM are all direct competitors in the design, development, construction, and sale of townhomes. BSB is an architectural firm utilized by TCM and Pinnacle.

In order to better understand the issues involved in this motion, a brief overview of particular townhome products and relationships is necessary. Initially, Rottlund only sued Pinnacle Corporation, which does business as and is more commonly known as Town & Country Homes. Ultimately, an entity known as Town & Country of Minnesota, which Pinnacle refers to as its Minneapolis division but claims is a separate entity, was added. The Fredrikson & Byron law firm represented Pinnacle until September of 2002, (Doc. No. 86), and has always represented Town & Country of Minnesota. In

Page 364

September of 2002, the Holland & Knight law firm began representing Pinnacle. In its original complaint, Rottlund asserted ownership of a technical drawing copyright for a townhome product know as the Rush Creek Villa II, 8 unit w/no step.1 Rottlund claimed that Pinnacle was infringing the Villa II technical drawing copyright. Importantly for the discussion that follows, the main townhome product in Minnesota that allegedly infringes Rottlund's copyrights is known as the Homestead collection, but during the design/developmental phase, the Homestead Collection was called the " Villas." 2 Pinnacle claims that TCM is solely responsible for actually building the Homestead Collection townhomes, but it has become clear that Pinnacle's in-house architect Steve Sandelin was directly involved in the design or development of the Homestead Collection townhomes in Minnesota.

By this motion, Rottlund seeks sanctions against Pinnacle and its current and/or former counsel. The catalyst for this motion was the revelation in a deposition, after nearly two years of discovery, that Pinnacle, despite its repeated representations to the contrary, had not produced relevant documents clearly responsive to Rottlund's requests. That was the catalyst, but the motion involves much more than this isolated incident. The Court has lost some confidence in Pinnacle and its counsel's efforts in conducting discovery due to a troubling pattern of conduct involving abuse of the judicial process, discovery incompetence, and defiance of Court orders, not to mention periodic episodes of brazen disrespect to the Court and an instance of cowardly harassment during a deposition. The climax is this motion, but the problems have been building over a long period of time. Sanctions are warranted.

II. FINDINGS OF FACT

The Court notes at the outset that its familiarity with all aspects of this case is pervasive given the status conferences that the Court has conducted at a rate of at least one per month since approximately October of 2002 as well as discovery and dispositive motion practice. That said, the Court makes the following findings.

A. Pinnacle's Lack of Candor in Connection with Its Motion to Dismiss for Lack of Personal Jurisdiction

On July 5, 2001, Rottlund sent Pinnacle a cease and desist letter warning Pinnacle that it was engaging in architectural design copyright infringement. (Davenport Aff. ¶ 74). Pinnacle's general counsel, Peter Brennan, obtained the letter and gave it to Pinnacle's in-house architect, Steve Sandelin. Four days later, Sandelin took the letter and faxed it to Larry Moore, an architect at BSB, and stated:

Please see the attached letter, where Rottlund's attorney references the back to back townhomes your firm designed for our Centennial Crossing community in Maple Grove, MN. They are obviously similar to Rottlund's Villa product. Are these designs under a co-ownership agreement with them or are they yours alone? What's our situation with them? We need to develop a response quickly.

(Davenport Aff. Ex. 23) (emphasis added).

On July 17, 2001, attorney Dean Karau from the law firm of Fredrikson & Byron responded to Rottlund's cease and desist letter. (Davenport Aff. Ex. 24). Karau's letter made clear that Pinnacle d/b/a Town & Country knew townhome designs were at issue but wanted Rottlund to clarify exactly which designs allegedly were being infringed. Id.

Rottlund filed suit against Pinnacle on October 30, 2001, alleging infringement of its technical drawing copyright. (Compl. ¶ ¶ 13-14, 23, Ex. A). At this point, Pinnacle was represented by the Fredrikson & Byron firm. Pinnacle answered the complaint and asserted that this Court lacked personal jurisdiction over Pinnacle. (Davenport Aff. Ex. 5). Pinnacle asserted in its First

Page 365

Amended Answer that it " has never developed ... any homes on the Hollander Property, in the Centennial Crossing development ... in Maple Grove, or anywhere else in Minnesota." (Davenport Aff. Ex. 6, at p. 5-6). Almost three months after the complaint was filed, on January 22, 2002, Pinnacle served a motion to dismiss for lack of personal jurisdiction and filed it with the Court on February 15, 2002.

Pinnacle's argument, advanced by the Fredrikson & Byron firm, in support of the motion to dismiss was the bold, blanket assertion that Pinnacle has never had any contact with Minnesota with regard to townhomes, and, more specifically, Pinnacle " had no involvement in any way in developing the Hollander Property [the Centennial Crossing development in Maple Grove, Minnesota]." (Davenport Aff. Ex. 26, at 5). Pinnacle also argued in its reply memorandum that it " has not taken any action inside or outside Minnesota that is affecting Rottlund in Minnesota," and " [t]he Court should deny Rottlund's request to go fishing for non-existent facts relating to jurisdiction. " (Davenport Aff. Ex. 12, at 22, 26) (emphasis added).3 As explained below, the waters of Pinnacle were an angler's paradise, but the locals would have rather not revealed their hot spots.

On April 2, 2002, prior to oral argument on Pinnacle's motion to dismiss, Pinnacle attorney Dean Karau spoke with James Grundmeier, an architect from BSB. (Davenport Aff. Ex. 30). Grundmeier forwarded Larry Moore's-another BSB architect-design file to attorney Karau, which was received on April 3, 2002. Id.; (Davenport Aff. Ex. 32). As Rottlund thoroughly explains in its brief, (Rottlund Mem. in Supp. of Mots. for Sanctions, at 9), Larry Moore's design file contains several documents that unequivocally demonstrate that Pinnacle architect Steve Sandelin was heavily involved in designing the allegedly infringing townhomes in Minnesota:

1. On April 9, 1998, BSB architect Larry Moore sent Art Plante, TCM's president, townhome designs for a product in the Chicago market and stated: " [w]e can't use these units, but this concept might be worth considering for the Minneapolis area.... I believe Doug Buster and Steve Sandelin are meeting on Friday to discuss the possibilities." (Davenport Aff. Ex. 32, at D00252).

2. On May 5, 1998, Larry Moore sent Steve Sandelin a " [c]ompetition product survey for the Minneapolis area" concerning the Villa townhomes. Id. at D00225.

3. On May 14, 1998, BSB architect Chris Jorgensen sent Steve Sandelin a revised concept plan and partial elevation for the Villas. Id. at D00214.

4. On May 30, 1998, Larry Moore sent Steve Sandelin revised schematic unit plans for the Villas. Id. at D00205.

5. On June 2, 1998, Chris Jorgensen sent Steve Sandelin and Art Plante revised master bath and closet designs for the Villas. Id. at D00203.

6. On June 10, 1998, Larry Moore sent Steve Sandelin and Art Plante revised plans for Unit A and B " per your most recent comments." Id. at D00196.

7. On June 26, 1998, Chris Jorgensen, at the request of Art Plante, sent Steve Sandelin the " latest floor plans & elevations" for the Villas for Sandelin's review and comment. Id. at D00178.

These documents are all significant because they...

To continue reading

Request your trial