MG Design Associates, Corp. v. CoStar Realty Information, Inc.

267 F. Supp. 3d 1000
CourtDistrict Court, N.D. Illinois
DecidedJuly 19, 2017
DocketNo. 16 C 5166
StatusPublished
Cited by14 cases

This text of 267 F. Supp. 3d 1000 (MG Design Associates, Corp. v. CoStar Realty Information, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MG Design Associates, Corp. v. CoStar Realty Information, Inc., 267 F. Supp. 3d 1000 (N.D. Ill. 2017).

Opinion

SARA L. ELLIS, United States District Judge

OPINION AND ORDER

Plaintiff MG Design Associates, Corp. (“MG”) thought that it was going to design and build a tradeshow exhibit for Defendants CoStar Realty Information, Inc. (“CoStar”) and Apartments, LLC d/b/a Apartments.com (“Apartments”) (collectively the “CoStar Defendants”), but, after MG designed the exhibit, the CoStar Defendants took MG’s designs and asked Defendant Northwind Enterprises, Inc. d/b/a Atlantic Exhibits (“Atlantic”) to build the exhibit instead. After the. Court previously dismissed MG’s suit without prejudice, finding that Defendants possessed sufficient contacts with Illinois to authorize personal jurisdiction but also finding that MG failed to properly allege a copyright claim and declining to review MG’s pendent state law claims [38], MG filed its First Amended Complaint, alleging breaches of contract, fraudulent misrepresentation, and tortious interference with both contract and prospective economic advantage.1 Pefendants now.move the Court to revisit its prior decision regarding personal jurisdiction and to dismiss the First Amended Complaint for fajlure to state a claim. The Court grants in part and denies in part the CoStar Defendants’ motion [44], dismissing Count II for lack of personal-jurisdiction but denying the motion to dismiss MG’s other claims against them [1008]*1008because MG adequately alleges a claim for breach of contract and fraudulent misrepresentation. Because the Court has personal jurisdiction over Atlantic and because MG plausibly alleges that it had a contract and a business relationship with the CoStar Defendants, about which Atlantic knew, the Court denies Atlantic’s motion [46]. All Defendants must answer the First Amended Complaint by August 18, 2017.

BACKGROUND2

MG, an Illinois corporation with its principal place of business in Pleasant Prairie, Wisconsin, designs and constructs tradesh-ow exhibits. From 2000 to 2014, it did this type of work for exhibits relating to “Apartments.com,” a real estate website that was owned by Classified Ventures, LLC (“Classified Ventures”).

In 2014, CoStar, a real estate information company, bought the Apartments.com-related assets and liabilities from Classified Ventures. CoStar is a Delaware corporation with its corporate headquarters in Washington, D.C., Doc. 12-1, Ex. A ¶2, operates an office in Chicago, Illinois, and is registered to do business in -Illinois.

CoStar formed Apartments to run the Apartments.com website. Apartments is a Delaware limited liability company, and CoStar is Apartments’ sole member. Id. ¶¶3-4. Although MG alleges that Apartments’ primary office is in Chicago, Apartments’ corporate executives, including its Chief Executive Officer, Executive Vice President of Operations, Executive Vice President of Accounting and Finance, and General Counsel and Secretary have “directed, controlled, and coordinated its business from Washington, D.C,” id. ¶7. Apartments’ only other corporate officer, its president, resided in Illinois until January 2016. Id. ¶ 9. Between April 2014 and the summer of 2016, Apartments maintained its departments for product design and development, multi-family field sales, finance, and customer service in Chicago. Id. ¶ 11. Apartments then moved the “majority of [its] departments,” including its finance, marketing, and customer service departments, to Atlanta, Georgia between the summer of 2016 and January 2016. Id. ¶ 12. It is unclear whether any departments remain in Chicago. See id. (explaining that majority of departments moved, but not stating that all departments moved).

In April 2015, Sharon Patenaude, who had formerly worked for Classified Ventures and who was now an employee of CoStar after the Apartments.com purchase, contacted MG to' design and build an exhibit for an upcoming conference in Las Vegas, Nevada. Between April 22 and 26, 2016, Patenaude was in San Antonio, Texas for a work project. Doc. 36-1 ¶ 4. During that time, Mark Klionsky, a CoStar employee in Washington, D.C. asked Pate-naude to commission an exhibit for display in Las Vegas. Id. ¶ 5. Klionsky communicated a design idea to Patenaude. Id.

Patenaude then called MG’s Pleasant Prairie, Wisconsin headquarters to speak with Betty Kasper of MG. Patenaude wanted MG to design an Apartments.com-branded exhibit, making it “clear that Cos[1009]*1009tar and Apartments would engage [MG] for all phases of work.” Doc. 39 ¶ 34. MG agreed to work on the Apartments.com exhibit at the traditional rates and costs. The parties, however, did not document their agreement in writing. The parties dispute from where Patenaude’s call originated: MG presents evidence from Pate-naude that she called MG “from her office in Chicago, Illinois” on or before April 28, 2015. Doc. 31-1 ¶7. The CoStar Defendants also present evidence from Pate-naude that she called MG “[w]hile still in Texas” between April 22 and 25,2015, Doc. 35-1 ¶ 7, and had reached out to MG by-April 24, Doc. 35-2 ¶ 6 & Ex. 3 (noting that. Patenaude had “put [MG] on notice”).

Patenaude drove to MG’s Pleasant Prairie office on April 27, 2015. Doc. 35-1 ¶ 7. While in the design phase for the exhibit, Patenaude was MG’s primary contact. She worked out of Chicago, but because Pleasant Prairie was so close (“about one hour away”), she “preferred to discuss [the exhibit] in person at the Pleasant Prairie office,” and “[t]he key discussions about the design... occurred at that office.” Id. ¶ 11. • In Wisconsin, Patenaude “discussed the draft design” for about an hour. Id. ¶7. She raised' Klionsky’s display ideas, and she also suggested other themes and design necessities. Id. ¶ 8. On May 4, Pate-naude visited MG’s Pleasant Prairie office again, where she viewed MG’s initial design renderings and asked for changes. Id. ¶ 10; Doc. 35-2 ¶¶ 7-8 & Ex. 4.

On May 7, 2015, MG produced an initial set of design renderings for an Apartments.com exhibit. On May 8,2015, CoStar employees in Washington, D.C, requested a few changes. Doc. 35-1 ¶ 12. On May 11, 2015, MG revised the design with a second set of design renderings (creating, the “Design Renderings”). MG emailed Pate-naude the final copy of the Design Renderings on May 11.

At some point during the week of May 11, Klionsky called Patenaude and told her that CoStar was not going to work with MG anymore, that another design firm would begin work on the Apartments.com exhibit for the Las Vegas conference, and that Patenaude was not going to work on the Las Vegas conference anymore either.’ Id. ¶ 13. On May 13, 2015, CoStar told MG that Patenaude was out and that CoStar was “terminating its business relationship with [MG] and that [MG] would not be performing any work for the production phase” for the Las Vegas exhibit. Doc. 39 ¶¶ 43-44. MG then sent an invoice for the design work to Patenaude in Chicago, which stated that no one could copy or use the Design Renderings without MG’s approval. Id. ¶ 47; Doc. 39-2; Doc. 31-1 ¶ 11. CoStar paid MG $16,500 for MG’s work on the Design Renderings. Atlantic then built a physical’ exhibit at the Las Vegas conference (the “Las Vegas Exhibit”), using the Design Renderings “as the basis” for the construction. Doc. 39 ¶ 48.

Atlantic advertised on its website that it designed the Las Vegas Exhibit. The Design Renderings, however, bore a legend on each page stating “[a]ll designs and ideas... are the creative property of [MG],” id.

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Bluebook (online)
267 F. Supp. 3d 1000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mg-design-associates-corp-v-costar-realty-information-inc-ilnd-2017.