Design Basics LLC v. J & V Roberts Invs., Inc.

• Decision Date: 11 September 2015
• Docket Number: No. 14–CV–1083–JPS.,14–CV–1083–JPS.
• Parties: DESIGN BASICS LLC and Plan Pros, Inc., Plaintiffs, v. J & V ROBERTS INVESTMENTS, INC. d/b/a Roberts Homes & Real Estate, and James A. Roberts, d/b/a Roberts Homes & Real Estate, Defendants, Wilson Mutual Insurance Company and Acuity a Mutual Insurance Company, Intervenors.
• Court: U.S. District Court — Eastern District of Wisconsin

130 F.Supp.3d 1266

DESIGN BASICS LLC and Plan Pros, Inc., Plaintiffs,

v.J & V ROBERTS INVESTMENTS, INC. d/b/a Roberts Homes & Real Estate, and James A. Roberts, d/b/a Roberts Homes & Real Estate, Defendants,Wilson Mutual Insurance Company and Acuity a Mutual Insurance Company, Intervenors.

No. 14–CV–1083–JPS.

United States District Court, E.D. Wisconsin.

Signed Sept. 11, 2015.

Michael T. Hopkins, IP–Litigation U.S. LLC, Milwaukee, WI, Dana A. Lejune, Dana Andrew Lejune Attorney at Law, Houston, TX, for Plaintiffs.

Brad L. Meyer, John P. Fredrickson, Boyle Fredrickson SC, Milwaukee, WI, Daniel J. Hurst, Epiphany Law LLC, Appleton, WI, David J. Pliner, Matthew D. Moeser, Corneille Law Group, Madison, WI, for Defendants.

ORDER

J.P. STADTMUELLER

, District Judge.

In this civil suit, filed on September 3, 2014, Plaintiffs, Design Basics LLC ("Design Basics") and Plan Pros, Inc. ("Plan Pros") (collectively, "the plaintiffs"), allege causes of action for both non-willful and willful violations of the Copyright Act, 17 U.S.C. § 106

, and violations of the Digital Millennium Copyright Act, 17 U.S.C. § 1202, against Defendant J & V Roberts Investments, Inc. ("J & V Roberts") and Defendant James A. Roberts (collectively "the defendants"). (Docket # 1).¹ The Court granted Wilson Mutual Insurance Company ("Wilson Mutual") and ACUITY a Mutual Insurance Company ("ACUITY") permission to intervene in this action. (Docket # 19, # 34).

On June 1, 2015, the defendants filed a Motion for Summary Judgment. (Docket # 45), Wilson Mutual filed a Motion for Summary Judgment and Declaratory Judgment (Docket # 42), and ACUITY filed a Motion for Summary Judgment (Docket # 51). The motions are now fully briefed and ready for disposition.² As discussed below, the Court will deny the defendants' motion; grant in part and deny in part Wilson Mutual's motion; and grant ACUITY's motion, as more fully described below.

1. FACTUAL BACKGROUND³

1.1. The Parties

The plaintiffs are engaged in the business of creating publishing and licensing architectural plans and designs, with their principal offices located in Omaha, Nebraska. (PPFF ¶¶ 1–2). The defendants are in the business of marketing, constructing and selling residential homes. (DPFF ¶ 2). James Roberts owns J & V Roberts Investments, Inc., which does business as Roberts Homes & Real Estate; Mr. Roberts opened this company in or about 1989. (DPFF ¶ 1). Intervenors, ACUITY and Wilson Mutual, issued various insurance policies to the defendant that are relevant to this action.

1.2 Alleged Infringement⁴

The plaintiffs' infringement claims in this case revolve around eight copyrighted architectural plans. Specifically, the eight (8) plans at issue are registered with the U.S. Copyright Office under copyright registration numbers VA 467–641 (hereinafter the "Adair" plan), VA 485–069 (hereinafter the "Waverly" plan), VA 778–706 (hereinafter the "Thomasville" plan), VA 1–070–137 (hereinafter the "Millington" plan), VA 467–639 (hereinafter the "Prairie" plan), VA 542–684 (hereinafter the "Avery" plan), VA 434–184 (hereinafter the "Fenton" plan), and VA 1–412–561 (hereinafter the "McClover" plan) (collectively, the "Copyrighted Works"). All of the Copyrighted Works were registered prior to their first publication. (PPFF ¶ 5). The defendants did not receive a license or authorization from the plaintiffs for the "Adair," "Waverly," "Thomasville," "Millington," "Prairie," "Avery," "Fenton," or "McClover" plans. (PPFF ¶ 7).

Between 1989 and approximately mid–2009, J & V Roberts was a licensed dealer of a business called Wausau Homes.⁵ All of the homes built by J & V Roberts during those years were based upon licensed plans received from Wausau Homes.⁶ J & V Roberts had a license from Wausau Homes to build one of the allegedly infringing plans at issue in this case, the "Brookhaven" plan. (DPFF ¶ 4). As to the other seven plans at issue, the defendants allege that the home plans titled "Fox Hollow," "Wilshire," "RiverRidge," "Shadow Glen," and "Fairwind" were all designed for J & V Roberts for J & V Roberts' use by independent contractors who were retained in or about 2009. (DPFF ¶ 5). The defendants further allege that the home plans titled "Pattison" and "Havenwood" were designed by Scott Stallmacher for J & V Roberts' use; Scott Stallmacher was retained as an independent contractor in or about 2009. (DPFF ¶ 6).⁷

Plaintiffs claim the defendants have infringed on copyrights in the subject plans as far back as August 2002. (DPFF ¶ 11). The plaintiffs allege the following copyright violations:

(1) Design Basic's "Adair"—infringed by the defendants' "Fox Hollow";

(2) Design Basic's "Waverly"—infringed by the defendants' "Wilshire";

(3) Design Basic's "Thomasville"—infringed by the defendants' "River Ridge";

(4) Design Basic's "Millington"—infringed by the defendants' "Pattison";

(5) Design Basic's "Prairie"—infringed by the defendants' "Havenwood";

(6) Design Basic's "Avery"—infringed by the defendants' "Shadow Glen";

(7) Design Basic's "Fenton"—infringed by the defendants' "Brookhaven"; and

(8) Plan Pro's "McClover"—infringed by the defendants' "Fairwind."

(See DPFF ¶¶ 4–6).

All of the works contained within the plaintiffs' home design catalogs, as well as all the works contained on the plaintiffs' website, http://www.designbasics.com, display Plaintiffs' copyright management information, ensuring that all customers and potential customers know that Plaintiffs' own all rights and title to their copyrighted plans. (PPFF ¶¶ 1, 7)

The plaintiffs allege that they first became aware that the defendants had violated their copyrights on September 10, 2011, when Mr. Cuozzo, an employee of the plaintiffs, discovered the activity. (PPFF ¶ 21). J & V Roberts posted the plans that allegedly infringe the plaintiffs' designs on the J & V Roberts website with J & V Roberts' logo, "Roberts Homes and Real Estate" prominently displayed in the upper-left corner of each plan page. (PPFF ¶ 23). The last page of J & V Roberts' Floor Plan Book bore the notation "All Plans in this book are the property of Roberts Homes, Custom View Design, and Stallmacher Architecture and are copyrighted as such." (PPFF ¶ 23).

1.3 Relevant Insurance Policies

Wilson Mutual Insurance Company issued the following policies to the various defendants: (1) Contractors policy issued to Roberts Homes & Real Estate ("Roberts Homes") and J & V Roberts Investments, Inc., from April 27, 2005, to April 27, 2010, Policy No. BC170885; (2) Businessowners policy issued to J & V Roberts Investments, Inc., and/or James and Vicki Roberts from April 27, 2009, to April 27, 2013, Policy No. BP232353; (3) Commercial umbrella policy issued to Roberts Homes and J & V Roberts Investments, Inc., from April 27, 2005, to April 27, 2010, Policy No. CU170883; (4) Business Insurance policies issued to J & V Roberts Investments, Inc., and/or James and Vicki Roberts from April 27, 2011, to April 27, 2015, Policy No. 3200254260; (5) Commercial Package Policy issued to Roberts Homes, J & V Roberts Investments, Inc., and James and Vicki Roberts from April 27, 2005, to April 27, 2009, Policy No. CP170882. (Wilson PFF ¶ 12).

ACUITY issued a policy of insurance to "J & V Roberts Inc." containing Commercial General Liability ("CGL") Forms and Commercial Excess Liability ("Excess") Forms under Policy No. F72223 during the policy term of: 4/27/01–4/27/02; 4/27/02–4/27/03; 4/27/03–4/27/04; and 4/27/04 to 4/27/05. (ACUITY PFF ¶ 22). Additional named insureds on the policy are James & Vicki Roberts and J & V Electric Inc. (ACUITY PFF ¶ 23). ACUITY has agreed to assume the defense of J & V Roberts Investments, Inc., d/b/a Roberts Homes & Real Estate and James A. Roberts d/b/a Roberts Homes & Real Estate under a reservation of rights. (ACUITY PFF ¶ 24).

2. LEGAL STANDARD

"The court shall grant 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." Fed.R.Civ.P. 56(a)

; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Ames v. Home Depot U.S.A., Inc., 629 F.3d 665, 668 (7th Cir.2011). "Material facts" are those under the applicable substantive law that "might affect the outcome of the suit." See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A dispute over "material fact" is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: "(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)

. "An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." Fed.R.Civ.P. 56(c)(4).

On summary judgment, courts must construe all facts and reasonable inferences in the light most favorable to the nonmoving party. See CTL ex rel. Trebatoski v. Ashland Sch. Dist., 743 F.3d 524, 528 (7th Cir.2014)

. Additionally, "[o]n summary judgment a court may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder." Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.2003). "Summary judgment is not appropriate ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ " Id. (q...