Schurr v. Austin Galleries of Illinois, Inc., 1416

• Decision Date: 05 October 1983
• Docket Number: No. 1416,D,1416
• Citation: 719 F.2d 571
• Parties: Jerome SCHURR, Plaintiff-Appellee, v. AUSTIN GALLERIES OF ILLINOIS, INC., a/k/a Austin Publishing Company, Defendant-Appellant. ocket 82-7924.
• Court: U.S. Court of Appeals — Second Circuit

Page 571

719 F.2d 571

Jerome SCHURR, Plaintiff-Appellee, v. AUSTIN GALLERIES OF ILLINOIS, INC., a/k/a Austin Publishing

Company, Defendant-Appellant.

No. 1416, Docket 82-7924.

United States Court of Appeals, Second Circuit.

Argued June 14, 1983.

Decided Oct. 5, 1983.

David S. Kashman, New York City (George Gottlieb, Gottlieb, Rackman & Reisman, P.C., New York City), for plaintiff-appellee.

Jerome R. Halperin, New York City (Jerome R. Halperin, P.C., New York City), for defendant-appellant.

Before VAN GRAAFEILAND, PIERCE and WISDOM, ^* Circuit Judges.

PIERCE, Circuit Judge:

Defendant appeals from an order of the United States District Court for the Southern District of New York entered on December 13, 1982, by Charles E. Stewart, Jr., Judge, finding defendant in contempt. The order found that defendant's manufacture, reproduction, and sale of certain works of art entitled "Hoyt's Cove," "Chasm," and "Horizon" constituted contempt by violating a Final Judgment on Consent entered on June 30, 1983.

BACKGROUND

Plaintiff-appellee Jerome Schurr is a financially successful commercial artist who produces seriagraph images of California and Western landscape scenes in an impressionistic form known as the California or Western style. Defendant-appellant Austin Galleries of Illinois, Inc. (Austin), is a chain of retail art galleries in the Chicago and Schurr's style of creation, accomplished by a silk screening method, features images of mountains, bodies of water, and sky. One basic color is chosen to represent each landscape component. The mountains are shown as a series of flat, superimposed planes, each slightly offset from the next, with the planes varying sequentially in thirty to thirty-five gradations of shades of the same color from light to dark. A narrow border in a contrasting color, representing a beach, appears at the interface of the water and mountains. People, buildings, wildlife or other details do not appear in Schurr's works. The Schurr works are priced at $600 to $1500. Also, they have become commercially popular as decorative art when reprinted as low price posters. According to Austin, the Schurr works are not of museum quality and are not considered fine art.

Detroit areas. In 1981, Austin formed a separate publishing division, Austin Publishing Company, to publish and distribute, at wholesale, signed limited edition prints. Among others, Austin manufactures and distributes the works of Robert Wilson, a commercial artist who creates California and Western coastline, lake, and mountain scenes.

In April, 1982, Schurr became aware that Austin was advertising and selling works of art attributed to Robert Wilson entitled "Blue Bay," "Canyon Lake," "Rocky Coast," "Reflections," and "Solitude." In May, 1982, Schurr commenced an action in the United States District Court for the Southern District of New York, in which he claimed that the five works of Wilson, manufactured and distributed by Austin, violated and infringed upon his (Schurr's) copyrighted works.

After settlement negotiations, the parties executed a Settlement Agreement and a Final Judgment on Consent. Paragraphs 2b and 3 of the Settlement Agreement and paragraph 5 of the Final Judgment on Consent provided, inter alia, that Austin would not manufacture, reproduce, print, or sell any work "which visually simulates the style and subject matter of any work created" by Jerome Schurr. ¹ E. Leonard Rubin, Austin's then Chicago counsel, forwarded a transmittal letter, dated June 16, 1982, to Schurr's New York counsel with the signed Settlement Agreement and Final Judgment on Consent. Paragraph three of the transmittal letter stated:

I feel it important to once again stress that the language "... visually simulates the style and subject matter of any work created by SCHURR ..." as it appears in paragraphs 2b) [sic] and 3 of the Settlement Agreement and in paragraph 5 of the Final Judgment on Consent, is not intended to and should not be interpreted to limit in any way any lawful right of Austin Galleries of Illinois, Inc. to use or sell works that imitate the style of Jerome Schurr, so long as such imitation does not constitute copyright infringement; the point is that Austin Galleries is not agreeing to surrender any of the On June 30, 1982, the Final Judgment on Consent was entered by the United States District Court for the Southern District of New York.

lawful rights it may have under United States copyright laws.

On November 24, 1982, Schurr initiated a proceeding to hold Austin in contempt for the latter's alleged failure to comply with the Final Judgment on Consent. Schurr contended that four new works by Robert Wilson--"Eagle Pass," "Rocky Reach," "Chasm," and "Cascade" (also known as "Hoyt's Cove")--which were featured in an advertisement which appeared in the November 1982 issue of Art Business News, violated the Final Judgment on Consent.

Upon Schurr's application, and after an initial visual comparison of the works at an oral hearing held by Judge Stewart, a temporary restraining order was entered prohibiting further sale of the four new Wilson works. The order was entered on November 24, 1982.

On November 29, 30, and December 1, 1982, a hearing as to contempt was held before the district judge. At the hearing, the four aforementioned Wilson works and another work--"Horizon"--were examined. Immediately following the hearing, on December 1, 1982, the judge rendered his opinion from the bench. He found Austin in contempt and enjoined further sales of "Chasm," "Horizon," and "Hoyt's Cove." An order encompassing the district judge's conclusion, dated December 8, 1982, was entered on December 13, 1982. This appeal followed.

DISCUSSION

A consent judgment or decree is "an agreement of the parties entered upon the record with the sanction and approval of the [c]ourt." Town of Oyster Bay v. Forte, 34 Misc.2d 5, 6, 219 N.Y.S.2d 456, 459 (N.Y.Sup.Ct.1961); see also Hart Schaffner & Marx v. Alexander's Department Stores, Inc., 341 F.2d 101, 102 (2d Cir.1965). For purposes of enforcement, a consent judgment should be construed and interpreted as a contract. United States v. ITT Continental Baking Co., 420 U.S. 223, 238, 95 S.Ct. 926, 935, 43 L.Ed.2d 148 (1975); Collins v. Thompson, 679 F.2d 168, 172 (9th Cir.1982); Robinson v. Vollert, 602 F.2d 87, 92 (5th Cir.1979), petition for reh'g and reh'g en banc denied, 609 F.2d 1177 (5th Cir.1980); New York State Association for Retarded Children, Inc. v. Carey, 596 F.2d 27, 37 (2d Cir.), cert. denied, 444 U.S. 836, 100 S.Ct. 70, 62 L.Ed.2d 46 (1979). As a contract, the scope of the consent judgment should be ascertained within the four corners of the instrument. ITT Continental Baking Co., 420 U.S. at 238, 95 S.Ct. at 935; United States v. Armour & Co., 402 U.S. 673, 682, 91 S.Ct. 1752, 1757, 29 L.Ed.2d 256 (1971); Robinson, 602 F.2d at 92; New York State Association for Retarded Children, Inc., 596 F.2d at 37; Hart Schaffner & Marx, 341 F.2d at 102.

However, "reliance upon certain aids to construction is proper, as with any other contract. Such aids include the circumstances surrounding the formation of the consent [judgment], any technical meaning words used may have had to the parties, and any other documents expressly incorporated in the decree." ITT Continental Baking Co., 420 U.S. at 238, 95 S.Ct. at 935 (footnote omitted); see also New York State Association for Retarded Children, Inc., 596 F.2d at 37. Additionally, a court may interpret the terms contained in a consent judgment by examining extrinsic documents. Instrumentalist Co. v. Marine Corps League, 694 F.2d 145, 151 (7th Cir.1982). Further, an examination of "the circumstances surrounding the order and the context in which the parties were operating" has been found by the Supreme Court not to violate the "four corners" rule. ITT Continental Baking Co., 420 U.S. at 243, 95 S.Ct. at 938.

The issue herein is whether the district court erred when it determined that Austin was in contempt of the June 30, 1982 consent judgment for manufacturing and selling the works of art entitled "Hoyt's Cove," "Chasm," and "Horizon." For the reasons which follow, we determine that the district court erred, and we reverse its decision.

The starting point of our analysis is, of course, the language of the consent judgment. Paragraph five of the consent judgment stated that Austin would not reproduce, print or sell "any work which visually simulates the style and subject matter of any work created" by Jerome Schurr. The district court judge, interpreting the language, stated:

I think, at least for the purposes of this proceeding, I don't have difficulty with the words in the consent judgment which are applicable here, that is, the defendant is enjoined from publishing, selling any work which visually simulates the style and subject matter of any work created by the plaintiff as applied to the facts of this case. I think that language is sufficiently clear and unambiguous.

....

For future reference I find that the letter [of June 16, 1982], Exhibit 1, which I took into account in interpreting the consent judgment, was delivered along with the consent judgment and was, so far as appears, accepted by the plaintiff [Schurr] at the time it signed the consent judgment. So that I find that it should be incorporated, in effect, with the consent judgment....

(Emphasis added).

Austin contends that the district court properly incorporated the explanatory language of the letter of June 16, 1982 in interpreting the provisions of paragraph five of the consent judgment. However, Austin argues in its brief that the language in paragraph five "had special meaning to the parties" and that "the language employed by plaintiff's counsel ... were [sic] intended between counsel for the parties to mean that Austin was not to be limited in any way from using or selling works that imitated the style of the plaintiff, Schurr, so long as such imitation did not...