Builders Mutual Insurance v. Donald A. Gardner Architects, Inc.

856 F. Supp. 2d 773, 2012 U.S. Dist. LEXIS 152536, 2012 WL 909928
CourtDistrict Court, D. South Carolina
DecidedMarch 15, 2012
DocketC.A. No. 6:10-cv-2322-MBS
StatusPublished
Cited by2 cases

This text of 856 F. Supp. 2d 773 (Builders Mutual Insurance v. Donald A. Gardner Architects, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Builders Mutual Insurance v. Donald A. Gardner Architects, Inc., 856 F. Supp. 2d 773, 2012 U.S. Dist. LEXIS 152536, 2012 WL 909928 (D.S.C. 2012).

Opinion

ORDER AND OPINION

MARGARET B. SEYMOUR, Chief Judge.

Plaintiff Builders Mutual Insurance Company (“Builders”) seeks a declaratory judgment that it is not obligated to cover an award of statutory damages and attorney’s fees entered against its insured, Defendant Banks & King, LLC (“B & K”), in the underlying copyright infringement action, Donald A. Gardner Architects, Inc. v. Banks & King LLC et al., No. 9:08-cv-02580-MBS. Defendants Richard A. Banks, James R. King, III, and B & K did not respond to the complaint or otherwise appear in this action. On December 10, 2011, the Clerk entered default as to those defendants. Plaintiff did not file a subsequent motion for default judgment; therefore, Defendants Richard A. Banks, James R. King, III, and B & K remain parties to this action.

Background

Underlying Action

Defendant Donald A. Gardner Architects, Inc. (“Gardner”) is an architectural firm that designs houses. B & K is a contracting company that builds houses. Gardner discovered photographs on B & K’s website depicting two houses that B & K had constructed with a notation underneath crediting Gardner for the designs. Gardner had no record of B & K or any of B & K’s clients purchasing the right to use its design on more than one occasion. Therefore, Gardner’s lawyer sent Defendant Andy Banks (“Defendant Banks”) a letter advising him of the discovery of the photographs and informing him that use of the plans without permission constituted copyright infringement. Defendant Banks responded, providing proof that B & K had built one of the photographed houses for a client who had independently obtained a license from Gardner to use the plans. As for the second photographed house, B & K admitted that they had built it without paying a “re-use” fee, but claimed that it had not done so intentionally. Rather, one of B & K’s clients had been given several plans including the Gardner design from which to choose a house, and he selected the Gardner design. Afterwards, B & K failed to ensure that the license fee for the Gardner design was paid for.

In the underlying action, Gardner filed a complaint alleging that B & K committed copyright infringement in violation of 17 U.S.C. §§ 101 et seq. by copying, publishing, distributing, advertising, marketing, selling, and constructing architectural works which were copied or otherwise derived from Gardner’s copyrighted design #256 (“the Gardner design”) without authorization.

On July 17, 2009, Gardner filed a motion for summary judgment alleging that it possessed a valid copyright in the Gardner design which was infringed by B & K’s construction of a home from unlicensed copies of the design. In their response to Gardner’s motion for summary judgment, B & K conceded that they are liable for infringement of Gardner’s copyright by constructing a house using the Gardner design without acquiring the license to do [775]*775so. However, B & K noted that the use of a picture of the completed house on its website to advertise the quality of its services was entirely irrelevant to the action. Donald A. Gardner Architects, Inc. v. Banks & King LLC et al., No. 9:08-cv-02580-MBS; ECF No. 49, p. 12. Gardner did not respond to this statement in its reply.

On July 1, 2010, this court granted Gardner’s motion for summary judgment on the basis that B & K “concede[d] they are liable for infringing on Plaintiffs copyright” and awarded statutory damages in the amount of $750.00. On July 19, 2010 this court granted Gardner’s motion for attorneys’ fees and awarded $78,251.65.

Gardner has been unsuccessful in collecting the judgment against B & K. B & K was insured by Builders under a Commercial General Liability (“CGL”) policy (“the Policy”). Gardner sent a letter to Builders, requesting that it pay the judgment amount on behalf of its insured. Builders refused, contending that the damages are not covered by the Policy’s terms. Builders then filed the instant declaratory judgment action. Builders contends that the Policy did not provide coverage for copyright infringement actions generally and only provided coverage if damages entered against the insured were for copyright infringement “in [their] advertisement.”

Builders argues that the underlying action was not based on copyright infringement in an advertisement and was solely based on copyright infringement through B & K’s construction of a house. Moreover, Builders argues that Gardner did not litigate the issue of advertising infringement in the underlying case. Gardner counters that the underlying opinion from this court encompassed a finding that B & K infringed Gardner’s copyright both by constructing the house without paying Gardner a license fee and by publishing a photograph of the house on its website. Gardner contends that the website photograph is covered by the Policy as infringement in an advertisement. The parties filed cross-motions for summary judgment that are currently before the court.

In support of its motion, Builders alleges that the website photograph does not constitute copyright infringement because 17 U.S.C. § 120(a) creates an exemption for photographs of architectural works. Gardner argues that that the legislative history of § 120(a) demonstrates that Congress never intended it to be a “shield for an infringer of an architectural work, who after infringing, publishes photographs of its infringement.” Gardner argues that the exemption applies to innocent activities of photography, painting, other pictorial representations, or displays of architectural works for private purposes and that the intent was to protect photographers, sightseers and artists from incurring infringement liability, not architects and builders who seek to display photographs of their infringement.

Gardner cites to the testimony of witnesses at the Congressional hearings on § 120(a) as support for the idea that Congress did not contemplate that § 120(a) would permit a builder to publish a photograph of an infringing house he constructed. Gardner cited testimony from the American Institute of Architects (“AIA”), wherein AIA stated, “We do, however, object to the indirect copying of protected architectural works through pictorial representations.” Architectural Design Protection: Hearing on H.R. 8990 and H.R. 8991 Before the H. Subcomm. 8 on Courts, Intellectual Property, and the Administration of Justice, 101st Cong. (Mar. 14, 1990), at 116. Gardner also cited testimony from the American Society of Magazine Photographers (“ASMP”), contending that [776]*776the intent of Congress was to protect photographers, sightseers, and artists from incurring liability for infringement, not “architects and builders who theoretically may seek to use a photograph in an infringing manner.” Id. at 197 (statement by Charles D. Ossola, on behalf of ASMP).

Discussion

Standard of Review

Summary judgment should be granted “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P.

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856 F. Supp. 2d 773, 2012 U.S. Dist. LEXIS 152536, 2012 WL 909928, Counsel Stack Legal Research, https://law.counselstack.com/opinion/builders-mutual-insurance-v-donald-a-gardner-architects-inc-scd-2012.