Home Design Servs., Inc. v. Turner Heritage Homes, Inc.

• Decision Date: 31 March 2015
• Docket Number: Case No. 4:08cv355/MCR/CAS.
• Citation: 101 F.Supp.3d 1201
• Parties: HOME DESIGN SERVICES, INC., Plaintiff, v. TURNER HERITAGE HOMES, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

101 F.Supp.3d 1201

HOME DESIGN SERVICES, INC., Plaintiff,

v.TURNER HERITAGE HOMES, INC., et al., Defendants.

Case No. 4:08cv355/MCR/CAS.

United States District Court, N.D. Florida, Tallahassee Division.

Signed March 31, 2015.

Jon Douglas Parrish, Kirt Ross Posthuma, David P. Fraser, Floyd S. Yarnell, Parrish White & Lawhon PA, Naples, FL, for Plaintiffs.

Jeffrey Scott Boyles, Brian R. Gilchrist, Ryan Thomas Santurri, Allen, Dyer, Doppelt, Milbrath & Gilchrist, P.A., Orlando, FL, Kirt Ross Posthuma, Parrish Lawhon & Yarnell PA, Naples, FL, for Defendants.

ORDER

M. CASEY RODGERS, Chief Judge.

Plaintiff Home Design Services, Inc. (“Home Design”) filed this suit against Defendants for copyright infringement of an architectural home design titled “HDS–2089,” claiming that Defendants built 165 infringing homes as part of their “Laurent”and “Dakota” designs based on slightly modified copies of the HDS–2089. A five-day jury trial was held in March 2014, with a focus on whether the Laurent and Dakota designs were sufficiently similar to the HDS–2089 to constitute infringement.¹The jury returned a verdict in favor of Home Design, finding that HDS–2089 was a validly registered and original work to which Defendants had access, that all of Defendants' allegedly infringing home designs were substantially similar to HDS–2089 and were not independently created, and that each Defendant infringed Home Design's copyright. The jury awarded Home Design $127,760 in actual damages, and zero in lost profits. Pending before the Court are the parties' Motions for Judgment as a Matter of Law and alternative Motions for a New Trial, which require the Court to decide, first, whether the evidence supports the jury's verdict on infringement and, second, whether the jury's damages award fails to account for the evidence of Defendants' profits presented at trial.²On careful consideration of the record and relevant law, the Court finds that the jury's verdict on infringement must be overturned. Additionally, should the Eleventh Circuit disagree and reinstate the jury's verdict, the Court also finds that the jury's verdict on damages should stand.

Home Design is a residential design firm that sells pre-drawn house plans through magazine publications and websites. The company serves different clients, including builders who seek routine designs with square-footage specifications, individuals who want a custom home from scratch, and those who want to modify one of Home Design's stock plans for building. The price of Home Design's stock plans varies based on square footage, but those purchased for a one-time use typically cost around $1,000.³Defendants Doug Turner and his father, Fred Turner, were directors of Defendant, Turner Heritage Homes, Inc., a general contracting company that built homes in planned residential communities until it went out of business in 2009. At the time of Defendants' alleged infringing activity, Turner Heritage Homes had multiple “selling companies” that sold homes to buyers in particular communities. The selling companies had no employees or offices of their own, and were managed directly by the Turners.⁴According to Doug Turner, Turner Heritage Homes did not design plans but instead purchased plans for its homes from a company called Creative Residential Design. ⁵

Defendants conceded that the Laurent home plan was created in 1999, and that their Dakota plan was simply a slight modification of the Laurent, with the primary distinction being the Dakota's inclusion of a “his and hers” closet.

Two key issues at trial were whether HDS–2089 is an original design deserving of copyright protection, and whether the Turners had access to the design. Home Design's chief executive officer, James Zirkel, testified that he created HDS–2089 in 1991 for a builder named Bill Silliman.⁶Home Design registered HDS–2089 with the Copyright Office in August 1991,⁷and aggressively marketed the work during the mid–1990s, selling the plan over 3,000 times. From 1989 through 2005, Home Design attended annual marketing events where it displayed HDS–2089, along with its magazines and plan books. Defendant Doug Turner purchased a plan book at one of these events in 1994. Although it is unclear whether the plan book Turner purchased included HDS–2089, it was undisputed that the plan was on display at Home Design's event booths and also that Home Design's employees were instructed to provide the annual magazine, which included the HDS–2089 floor plan, to each builder who purchased a plan book. It was also undisputed that Doug Turner was on Home Design's mailing list for the company's magazines in 1995 and 1997, and that those particular editions included the HDS–2089 floor plan.

Much of the testimony at trial focused on the similarities and dissimilarities between HDS–2089 and Defendants' Laurent and Dakota plans. Zirkel compared the HDS–2089 floor plan with one of the first few Laurent homes that Defendants built.⁸

According to Zirkel, the two plans were similar “except for a few minor parts.” Differences that Zirkel identified, which he felt were “minor,” included different placements of the fireplaces; different orientations of the water closets; and the fact that the Laurent has a square corner on a wall whereas the corresponding wall in HDS–2089 is angled with different dimensions. Zirkel conceded that there were nearly twenty distinct differences between the HDS–2089 and the Laurent he was asked to compare, but reiterated that there are “numerous small changes, but not major changes” in the designs, and that some of those differences he considered “options.”⁹

Home Design's expert Kevin Alter compared HDS–2089 to the Laurent and Dakota designs and testified that he found the plans “extraordinarily similar,” to the point he felt the HDS–2089 may have been copied. Alter noted that “the overall shape, the massing, the individual layout of the rooms is the same.¹⁰They all have the same shape, width, and length.... They have the same organization of rooms. You enter the foyer, the dining room and living room on other side.” Alter found the “overall organization of traffic patterns” identical and the arrangement of rooms the same. He acknowledged “modest differences” among the designs, but felt that some of those differences did not make sense in the Laurent design, suggesting that HDS–2089 had been copied. For example, he said that “[t]he master bath water closet faces this way [but in Defendants' plan] it is turned ... [resulting in] wasted space here in a plan that is otherwise very, very efficient....”¹¹Finally, Alter considered certain distinctions between the plans insignificant, such as the placement of the fireplace, calling them “afterthoughts.”

Defense expert Robert Koch reviewed HDS–2089 and another Laurent design, and identified substantial dissimilarities between the designs, many of which he attributed to the Laurent's more “traditional” design as compared to the HDS–2089, which he felt was designed to be a “modern,” “casual,” and “relaxed” home. According to Koch:

• The entire elevation of the Laurent is different than the HDS–2089, and includes “a very expensive front porch that reache[s] from the front door all the way over [to] the bedroom ... on the opposing side,” a feature that is missing from the HDS–2089;

• The entry in the Laurent has a single door with walls and formal cased openings separating the spaces in the foyer, but the entry in HDS–2089 has double doors and no cased openings or headers above the walls in the foyer, causing a less formal and more open environment;

• The Laurent's family room has more traditional French doors with flanking formal windows, whereas the HDS–2089 has a modern sliding-glass door that creates a more casual feel;

• The backdoor to the Laurent's screened porch swings inward, whereas the backdoor in HDS–2089 swings outward to a covered patio;

• The nook in the Laurent has separate windows, reflecting a traditional design, whereas the nook in HDS–2089 has one continuous glass partition, which creates a more modern appearance;

• The Laurent's master bedroom has a single door with a formal set of conventional windows, but HDS–2089 has double doors with a single high window located above the bed's headboard, a more modern feature;¹²

• The home's porches have different configurations and columns;

• The fireplace in the Laurent is in a different location, designed specifically to accommodate and create space for a flat-screen television, a feature that is missing in the HDS–2089;

• The hallways have different dimensions and openings;

• Only the Laurent has a door between the master bedroom and the master bathroom;

• The water closets are positioned differently, causing a difference in hallway areas between the nooks and the master bedrooms and better obscuring the toilet from view in the Laurent;

• The master bathrooms have a “totally different” configuration, including a more traditional door shower in the Laurent versus a more modern doorless shower in the HDS–2089;

• The master bathroom in the Laurent has a linen closet separating the bathtub from the shower, whereas HDS–2089 has the linen closet between the water closet and the shower;

• The door between the garages and the mud rooms swing in different directions;• The Laurent's kitchen has cabinetry next to the stove range, but HDS–2089 has a desk;

• The wall that separates the family room and the kitchen in HDS–2089 does not extend all the way to the ceiling like it does in the Laurent, which again creates a more “casual,” “open,” and “informal” space in the HDS–2089;

• The secondary bathrooms have different style counter-tops, which affect access to the water-closet basin;

• There is no linen closet in the Laurent's pool bathroom like the one in HDS–2089;

• The secondary bedrooms have different windows and dimensions; and the living rooms have different angled walls abutting the family rooms, as well as different ceiling heights.¹³

On the matter of damages, Home Design...