Richmond Homes Management, Inc. v. Raintree, Inc.
| Decision Date | 07 September 1994 |
| Docket Number | Civ. A. No. 93-0047-C. |
| Citation | 862 F. Supp. 1517 |
| Court | U.S. District Court — Western District of Virginia |
| Parties | RICHMOND HOMES MANAGEMENT, INC., Plaintiff, v. RAINTREE, INC., Sunset Investments, Inc., and Jared R. Lake, Defendants. |
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W. Todd Benson, Thomas Ogburn Bondurant, Jr., Bondurant & Benson, Richmond, VA, for plaintiff.
George Howard Dygert, George H. Dygert & Associates, Sheldon H. Parker, Parker & Destefano, Charlottesville, VA, for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The court tried this copyright infringement action on June 1-2, 1994. Prior to the trial, this court on March 9, 1994, entered a preliminary injunction prohibiting defendant Raintree, Inc. from constructing any residential home infringing on the copyrights of plaintiff Richmond Homes Management ("Richmond Homes") in their Louisa home ("Louisa"). The court found prima facie evidence that the plaintiff possessed a valid copyright, that defendant Raintree had access to the plaintiff's design and structure, and that the defendant's Rockford home ("Rockford") was substantially similar to the Louisa. These findings were partly based on the testimony of Hilton Rubin, who stated in depositions that he was given a copy of the Louisa to place in the defendant's computer, and the testimony of Richard McCormick, who stated that he believed he owned a Louisa when in fact he owned a Rockford. Sunset Investments, Inc. and Jared Lake ("Lake") were joined as defendants on April 6, 1994. The court will outline the facts of the case below, which will be further developed in the course of determining appropriate legal conclusions.
The parties to this case are competitors in the Charlottesville housing market. Richmond Homes is a Virginia corporation in the business of land development and construction supervision, furnishing house plans and management services to a group of six "S" corporations engaged in real estate development in and around Charlottesville. The evidence does not disclose whether the plaintiff retains any ownership interest in these corporations. These corporations use plaintiff's house designs and provide fees to the plaintiff for the use of the designs, the amount of which was not established in the evidence. Robert Martinko oversees all construction activity for Richmond Homes.
Defendant Raintree is a Virginia corporation in the business of residential construction in the Central Virginia area surrounding Charlottesville, with its primary building activity in the Lake Monticello subdivision in Fluvanna County. Defendant Sunset Investments is a Virginia corporation principally in the business of purchasing lots for resale at Lake Monticello subdivision and in the surrounding area. Defendant Jared L. Lake is an individual who resides in Albemarle County, Virginia. He is the sole stockholder in Raintree and Sunset Investments. He has been at all times, and is presently, the sole director and President of Sunset Investments and the sole director and Secretary/Treasurer of Raintree. In 1992, he was also the President of Raintree.
The plaintiff presented prima facie evidence of valid copyrights in the house plans, architectural work, and an architectural flyer of the Louisa, which were obtained in May 1992. The Louisa registrations were revised around August 1992 to clarify the fact that the Louisa is a derivative work based on plaintiff's prior design, the Heritage home ("Heritage"). Richmond Homes applied for and received a copyright registration for the plans of the Heritage in 1987, which it continues to own. The defendants did not introduce evidence to rebut the validity of the Heritage copyrights.
The floor plans of the Heritage and Louisa are essentially the same, except for the fact that the Louisa contains forty to forty-eight additional square feet of floor space. The floor plans of the Heritage, incorporated into the Louisa, are not particularly unusual but are nonetheless original. The distinguishing feature of the floor plan in each case is the placement of the family room in the front of the house, normally the location of the formal room; also distinct are the arrangement and spacing of the various components of the interior layout. The defendants introduced no floor plans substantially similar to those plaintiff developed, except the floor plans of the Rockford.
Likewise, the exterior of the Louisa is the original creation of the plaintiff. Though the double-gabled roofs, windows, and other components used in the Louisa exterior are not original elements of house design, "what distinguishes houses one from another, is how they're put together." Testimony of Ann Collins. The Louisa exterior, like the interior, is derived from the plaintiff's Heritage. The exterior is significantly different from that of the Heritage, however. Whereas the Heritage has a peaked roof over the family room and a shed roof over the porch at the front door, the Louisa has a double-gabled roof over the family room and front porch. This change consisted of extending the roof from the peak of the house over the front door to the edge of the porch and adding a gable roof running over the other side of the porch, joining the long sloped roof from the peak of the house. Other changes from the Heritage were made in the front elevation of the Louisa to accommodate the change of roofline, including the elimination of one window, the installation of a second octagonal vent at the peak of the porch roof, and the removal of a small cantilever of the second floor. The double windows, the placement of the dual octagonal vents, and the differently sloping rooflines contribute to the Louisa's distinctive design.
Robert Martinko and V. Earl Dickenson of Richmond Homes developed both the Heritage and Louisa designs. Mr. Martinko testified that the genesis of the Louisa was a "change in philosophy," the idea being that diverse front facades should be created to accompany the preexisting floor plans in the company's inventory to expand consumer choice. Testimony of Robert Martinko. That the design is original is supported by the fact that none of the defendants' expert witnesses identified a home that could be confused with the Louisa, based on exterior appearance. See Testimony of Bruce Wardell.
As previously noted, this court granted a preliminary injunction based in part on the statement of Richard McCormick that he believed he owned a Louisa home, when in fact he owned a Rockford. Gary Smith, another Raintree customer, testified to the similarity between the Rockford he purchased and the Louisa. Furthermore, plaintiff's expert witness, architect Ann Collins, testified that the Rockford and the Louisa could be attributed to the same author.
The exhibits submitted at trial show that all of the Rockford interiors, and all of the exteriors except one, are substantially similar to the Louisa. The family room is located in the same place, with virtually identical dimensions; door and window placements are substantially similar, as are the location and sizes of rooms and closets. On the exterior, to the untrained eye, the original McCormick home and the Louisa are identical. The defendants altered their Rockford designs somewhat in response to customer input, but nearly all of the subsequently constructed homes are substantially similar to the Louisa. Where certain Rockfords do not connect the front gables with a single sloping roofline, as the Louisa does, or in cases where side garages have been added, these are minor variations on the basic Louisa design. The similarities in the slope of the roof, the double windows on the front of the house, and the dual air vents continue to exist. The only Rockford exterior that is substantially different from the Louisa is the Rockford built on Lot 14, Section 8 of Lake Monticello. The Rockford depicted in Raintree's advertisements is identical to the Louisa.
Though it is unclear from the evidence exactly when, or in what format, Raintree's former employee Hilton Rubin was given a depiction of the Louisa, Mr. Rubin testified that he was told to put a rendering of the Louisa on Raintree's computer at approximately the time when Raintree was negotiating with two customers interested in the Louisa design. Buttressing this evidence of copying is the testimony of plaintiff's expert Robert Kirchman, who showed how a Raintree depiction of the Rockford elevation was a "second generation" rendering, likely created by copying the Louisa.
Rubin's testimony, at the very least, supports the weight of the evidence that the defendants had access to the Louisa design. One Louisa had been constructed in the vicinity of Charlottesville prior to the Rockford's creation. Frank Brown, a realtor responsible for marketing plaintiff's houses in the Charlottesville area, distributed marketing brochures depicting the exterior and floor plans of the Louisa prior to June or July of 1992, including posting copies in open houses and mailing brochures to real estate agents selling substantial numbers of homes in the Charlottesville area. Furthermore, the witness Smith testified that he had been provided with a brochure depicting the Louisa prior to meeting with a Raintree sales agent and may have shown it to the agent. The witness McCormick had also been provided with a packet of information by Richmond Homes, which may have included a depiction of the Louisa, prior to negotiating with Raintree for the purchase of a house. Defendants' access to the plaintiff's brochures is supported by the testimony of defendant Jared Lake, who admitted that he obtained a copy of a Louisa brochure after he heard rumors of being sued.
Mr. Lake tried to counter the evidence of copying and access by...
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