Joseph J. Legat Architects v. United States

• Decision Date: 25 November 1985
• Docket Number: No. 84 C 8803.,84 C 8803.
• Citation: 625 F. Supp. 293
• Parties: JOSEPH J. LEGAT ARCHITECTS, P.C., Plaintiff, v. UNITED STATES DEVELOPMENT CORPORATION, Esper A. Peterson, Seth Pines and Royal Oak Apartments Phase III, Defendants.
• Court: U.S. District Court — Northern District of Illinois

625 F. Supp. 293

JOSEPH J. LEGAT ARCHITECTS, P.C., Plaintiff, v. UNITED STATES DEVELOPMENT CORPORATION, Esper A. Peterson, Seth Pines and Royal Oak Apartments Phase III, Defendants.

No. 84 C 8803.

United States District Court, N.D. Illinois, E.D.

November 25, 1985.

Thomas A. Morris, Jr., Nicholas Anaclerio, Jr., Brydges, Riseborough, Morris, Franke & Miller, Waukegan, Ill., for plaintiff.

Thomas W. Gooch, Thomas R. Ruth & Assoc., Barrington, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

This bitter suit between an architect and a developer has spawned many overlapping motions, which have unduly complicated the case. Joseph J. Legat Architects, P.C. ("Legat P.C.") sued United States Development Corporation ("USCD"), its president Esper Peterson ("Peterson") and one of its architects Seth Pines ("Pines") in a fifteen count complaint alleging federal copyright and trademark claims, as well as pendent state claims of breach of contract and unfair competition. Early this year we held that we had subject matter jurisdiction over the case. See Legat v. United States Development Corp., 601 F.Supp. 673 (N.D. Ill.1985). Since then, we have referred Counts I and II, breach of contract claims, to arbitration before retired Illinois Supreme Court Justice Walter Schaefer, but retained jurisdiction over the rest of the case.¹ Now before the Court are several motions, including motions by the defendants to dismiss Counts III-XV and for summary judgment as to Counts I and II and a motion by Legat P.C. for a preliminary injunction. For the reasons stated below, each of defendants' motions is denied; Legat P.C.'s motion is granted in principle, but no formal order is entered with this opinion.

Facts

Although the parties have been fighting over what happened between them, much of their dispute centers over interpretation of the facts, not over the facts themselves. Unless indicated otherwise, the facts recited below are not in dispute.

Legat P.C. is an architectural firm headed by Joseph Legat, an architect for over twenty years. On October 1, 1981, Legat P.C. contracted with Peterson and USDC to draw up architectural plans for a federally subsidized housing project called the Royal Oak Apartments Phase III project ("Royal Oak project" or "the Project"). The contract was a standard form agreement of the American Institute of Architects ("AIA"). Article 5.1 of the Agreement governs ownership of the documents Legat was to create, and it states:

Drawings and Specifications as instruments of service are and shall remain the property of the Architect whether the project for which they are made is executed or not. The Owner Peterson and USDC shall be permitted to retain copies, including reproducible copies, of Drawings and Specifications for information and reference in connection with the Owner's use and occupancy of the Project. The Drawings and Specifications shall not be used by the owner on other projects, for additions to this project, or for completion of this Project by others provided the Architect is not in default under this Agreement, except by agreement in writing and with appropriate compensation to the Architect.

The Agreement provided that USDC would pay Legat P.C. $50,000 for designing the Royal Oak project, in increments of $10,000, $30,000 and $20,000.

Legat and his employees drew up plans and delivered them to USDC and Peterson in November 1981. The Plans then conformed with relevant regulations of the Federal Department of Housing and Urban Development ("HUD") and the Lake County Department of Building and Zoning. However, between November 1981 and spring 1983, both the HUD and Lake County regulations changed, so that Legat's original architectural plans no longer conformed. Legat claims that he acceded to and fulfilled USDC's subsequent request to amend the Plans to bring them into conformity. Pines and Peterson claim in their affidavits that Legat never brought the Plans into conformity, and that Pines did so by revising them. Regardless of who revised the Plans, it is clear that Pines and Peterson filed the Plans with HUD and Lake County to secure approval to build the Project. Pines says he stamped and signed the following statement on the Plans he filed with HUD:

I hereby certify that I have reviewed the attached plans of Royal Oak Phase III, consisting of 21 pages. These plans comply with all applicable building codes, ordinances, rules and regulations of the County of Lake, State of Illinois and all rules and regulations of the Federal Housing Administration and Department of Housing and Urban Development. I assume full responsibility and liability for any defects in these plans, to the extent of the responsibility and liability of the design architect.

However, the cover sheet of the Plans on file with Lake County and HUD do not contain this statement, but identify Seth Pines as "Architect" and do not mention Legat at all as architect or otherwise.

USDC and Peterson began building, using the Plans on file with HUD and Lake County, having paid Legat only $20,000. They claim Legat breached the contract by submitting non-conforming plans and refusing to revise them. Legat asserts that he did revise the Plans, and that defendants thus have breached the contract. Moreover, he claims that the representations on the HUD and Lake County cover sheets that Pines was architect constituted copyright infringement, as well as a violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and of various state law statutes. Legat's preliminary injunction motion asks the Court to issue a writ of seizure under 17 U.S.C. §§ 501, 502 to impound the Plans and to enjoin the defendants from further copying and use of the Plans. Defendant's opposition to this motion overlaps their motion to dismiss. In a nutshell, they assert that they had a right under the contract and copyright laws to use the Plans in the way they did; that their acts cannot create any "likelihood of confusion," so that the various trademark and unfair competition claims must fail; and that Pines, as USDC's agent, must be dismissed from the counts which name him. We turn first to defendants' motion to dismiss, and then deal with Legat P.C.'s motion for preliminary injunctive relief.

B. The Motion to Dismiss

1. Standard of Review

We note at the outset that Legat's "motion to dismiss" must be considered as a motion for summary judgment. Both sides have submitted affidavits and other supporting materials with their briefs. Because we must turn to matters outside the pleadings to resolve defendants' motion, the standards of Fed.R.Civ.P. 56 apply. See Fed.R.Civ.P. 12(b). Defendants' unsupported protests to the contrary cannot trump this clear command of Rule 12(b).

We can grant defendants' summary judgment motion only if they can show that no genuine issue of material fact exists, and that they are entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984). We must view the evidence, as well as the reasonable inferences it creates, in the light most favorable to Legat P.C., the party opposing the motion. See, e.g., Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir. 1984). If defendants fail to carry their "strict burden," their motion will be denied, even if Legat P.C. mounts no opposition. Id. But if defendants successfully carry their burden, Legat P.C. must bear the resulting burden of creating a genuine issue. It cannot rest on naked pleadings or assertions in meeting this burden. Fed.R. Civ.P. 56(e); Big O, 741 F.2d at 163. Mindful of these familiar standards, we consider defendants' arguments in turn.

2. The Copyright Claims

Defendants argue that there can be no copyright infringement in this case because the parties' contract gave them a right to copy and reproduce the architectural plans for use in building the Royal Oak project. They assert that they did no more than what the contract allows them to do: they essentially were to pay a $50,000 "royalty fee" for the one time right or license to copy and use the plans to build the project. These assertions are essentially correct,² but miss the point.

It is true that Article 5.1 of the contract clearly grants defendants the right "to retain copies, including reproducible copies, of Drawings and Specifications for information and reference in connection with the Owner's use and occupancy of the Project." Obviously USDC, the general contractor, had the right to use and copy the Plans as reasonably necessary to build the Royal Oak project. Moreover, the contract also appears to give defendants the right to continue using the Plans even if Legat were in default. See above at 2 (quoting relevant contract provisions). But the contract is also unambiguous that the Plans remain the property of the architect Legat P.C. See Article 5.1. Legat P.C.'s grievance, as we understand it, is not that defendants were using and copying the Plans in order to build Royal Oak.³ Rather it complains that defendants exceeded its contractual rights by copying and filing these Plans in a way that suggested that Pines, not Legat, was the architect who created the Plans. No reasonable construction of the contract permits such a use of the Plans, argues Legat P.C. We agree. Assuming that Legat authored the Plans,⁴ we do not see how the contract authorized defendants to copy the Plans and suggest that Pines was their creator. This would be a plain infringement if proved. See below at 302.

Defendants take several tacks in justifying their actions, none of which support an award of summary judgment in their favor. Defendants, for example, argue that they own the Plans by virtue of Legat P.C.'s alleged contractual default. Yet they cite no authority for this proposition, and we perceive none.⁵ They fail to deal with the contract's plain language that Legat owns the Plans. In any event, this...