DeWitt v. Hutchins

309 F. Supp. 2d 743, 2004 U.S. Dist. LEXIS 9446, 2004 WL 609294
CourtDistrict Court, M.D. North Carolina
DecidedMarch 23, 2004
Docket1:03CV337
StatusPublished
Cited by27 cases

This text of 309 F. Supp. 2d 743 (DeWitt v. Hutchins) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DeWitt v. Hutchins, 309 F. Supp. 2d 743, 2004 U.S. Dist. LEXIS 9446, 2004 WL 609294 (M.D.N.C. 2004).

Opinion

ORDER OF THE UNITED STATES MAGISTRATE JUDGE

DIXON, United States Magistrate Judge.

This matter is before the court on Defendant Brenda Hutchins’ motion to dismiss the claims against her under Rule 12(b)(6) of the Federal Rules of Civil Procedure (docket no. 17-1), and on Plaintiffs’ motion to amend their complaint (docket *746 no. 43-1). The parties have consented to the jurisdiction of a magistrate judge. For the following reasons, Defendant Hutchins’ motion to dismiss is granted and Plaintiffs’ motion to amend their complaint is denied. Furthermore, although Plaintiffs waived their right to a jury trial, the court will exercise its discretion under Rule 39(b) of the Federal Rules of Civil Procedure and allow Plaintiffs to proceed with a jury trial.

Background Facts

The complaint alleges the following facts: Pro se Plaintiffs Harriet DeWitt and Steve O’Rear are married residents of Cloudland, Georgia. Together they own iron Age Crafters, Inc. (“IAC”), a closely held corporation that is in the business of “designing and manufacturing iron silhouette furnishings such as gates, light fixtures, tableware, and fireplace screens.” 1 Compl. ¶ 1. Dewitt, O’Rear, and IAC have developed a reputation for their distinct designs and trade dress, and they often create custom products in response to requests from direct buyers, wholesalers, and distributors throughout the nation. 2 Compl. ¶ 13. Plaintiffs allege that IAC, Dewitt, and O’Rear own the design and trade dress rights for the products, and they have never sold, consigned, or shared the rights with third parties.

Defendant Lady B. Goode, Inc. (“LBG”) is a closely held corporation that manufactures, markets, and distributes furnishings and lighting fixtures. LBG is located and headquartered in High Point, North Carolina. Defendant Brenda Hutchins, a resident of Winston-Salem, North Carolina, is the part or sole owner of LBG as well as the registered agent for LBG. Furthermore, Hutchins is both a shareholder and employee of LBG, and she “is exclusively responsible for the management and marketing of LBG products, with the assistance of her employees and agents.” Compl. ¶ 2.

Plaintiffs allege that sometime in late 2001, Defendant Hutchins approached Plaintiffs and asked them if they could translate the idea of a maypole into an iron chandelier for LBG to market and sell to third parties. The parties eventually entered into a contract in which Plaintiffs agreed to design, construct, and deliver numerous lighting fixtures and tableware, based on agreed-upon themes, to LBG, which would then wire, market, and sell the products to third-party buyers. 3 Compl. ¶ 14. Plaintiffs agreed to pay for the costs of translating the products’ themes into designs and manufacturing formats and providing prototypes, and Defendants agreed to pay for the costs of marketing and selling the final products. The parties agreed to split the profits, and they further agreed that the “profit” from each sale would be the selling price minus the “Product Cost,” which was “the cost of actual production, including cutting, powder coating, construction, wiring, shipping and labelling.” Compl. ¶ 14. Plaintiffs further allege that under the contract Defendants agreed to provide an accounting for each sale, including sale price and collection details, in a timely and professional manner, to maintain all records of those transactions, and to pay to Plaintiffs in a timely manner the parties’ agreed-to profit split. Compl. ¶ 15.

*747 Plaintiffs further allege that the parties also agreed that neither party would be responsible for providing an accounting of that party’s costs. Compl. ¶ 16, 17. That is, Plaintiffs were not required to provide an accounting for the costs incurred in design and fabrication, and Defendants would have no input into Plaintiffs’ decisions regarding those costs. Similarly, Defendants were not required to provide an accounting for the costs incurred in marketing, presenting, and advertising the products, and Plaintiffs would have no input into Defendants’ decisions regarding those costs. Finally, Plaintiffs allege that Defendants agreed to credit IAC with design of the iron products in the form of labeling or similar attribution, thus notifying third-party buyers that the trade dress rights belonged solely to IAC. Compl. ¶ 21.

Beginning in Fall 2001, Plaintiffs delivered to LBG prototypes of numerous agreed-upon products requested by LBG, including prototypes of chandeliers, sconces, and other items. LBG subsequently ordered about thirty chandeliers, matching sconces, plateaus, and napkins rings, which Plaintiffs delivered to LBG on or around April 2002. 4 Up until around August 2002, Plaintiffs continued to design, fabricate, and ship prototypes and final products to LBG upon LBG’s requests. During that time, however, Defendants failed to comply with the terms of the contract in numerous ways, including, among other things, by failing to maintain and provide timely and accurate sales records; by failing to make timely payments (or any payments at all) to Plaintiffs; by failing to credit IAC with the products’ designs and instead passing the designs off as exclusive designs of LBG; and by failing to account for or return inventory that LBG did not sell. Plaintiffs allege that they demanded in numerous telephone conversations and letters all payments due and a full sales accounting, and that they eventually demanded that LBG stop marketing, advertising, or selling any of the remaining inventories, but that LBG has continued to market, advertise, and sell IAC’s products while passing IAC’s designs off as its- own, despite LBG’s representations to the contrary. With these background facts in mind, I will now turn to Plaintiffs’ motion for leave to amend their complaint and Defendant Hutchins’ motion to dismiss.

Discussion

In their complaint, filed on April 16, 2003, Plaintiffs seek to recover against Defendants for patent law violations under the Lanham Act, 15 U.S.C. § 1125, and under state law claims for breach of contract, misrepresentation, and unjust enrichment. 5 Compl. ¶ 31. Plaintiffs also request an injunctive order under the Lan-ham Act’s injunctive relief provision, 15 U.S.C. § 1116, enjoining Defendants from marketing, advertising, reproducing, or selling any design or product of IAC, and a declaratory judgment that Plaintiffs are sole owners of the design and trade dress rights for each of the designs sold or delivered to LBG. Furthermore, Plaintiffs have now filed a motion for leave to amend their complaint, to bring additional claims for fraud and fraudulent inducement, to demand a jury trial, to add factual allegations based on “newly discovered evidence” to support the fraud and fraudulent induce

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Bluebook (online)
309 F. Supp. 2d 743, 2004 U.S. Dist. LEXIS 9446, 2004 WL 609294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dewitt-v-hutchins-ncmd-2004.