Monterey Bay Homes, LLC v. Chambers

11 F. Supp. 3d 570, 2014 U.S. Dist. LEXIS 42932, 2014 WL 1314241
CourtDistrict Court, D. South Carolina
DecidedMarch 31, 2014
DocketCivil Action No. 4:12-cv-00891-RBH
StatusPublished
Cited by1 cases

This text of 11 F. Supp. 3d 570 (Monterey Bay Homes, LLC v. Chambers) 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
Monterey Bay Homes, LLC v. Chambers, 11 F. Supp. 3d 570, 2014 U.S. Dist. LEXIS 42932, 2014 WL 1314241 (D.S.C. 2014).

Opinion

ORDER

R. BRYAN HARWELL, District Judge.

Plaintiff Monterey Bay Homes, LLC (“MBH”) filed this action against the above-captioned Defendants, alleging a single count of copyright infringement against each Defendant.1 Defendant Wall Tech, LLC filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Wall Tec, LLC’s Mot. for Summ. J., ECF No. 64. Subsequently, Defendants Robert Chambers and Rene Chambers (“the Chambers”) jointly filed their own motion for summary judgment, as well as a motion to exclude parts of the testimony of MBH’s expert witness. ECF Nos. 66, 67. MBH also filed a motion to exclude Wall Tec’s expert witness. MBH’s Mot. to Exclude, ECF No. 65. These four motions are now before the Court. The parties appeared before the Court for a February 18, 2014 hearing, and the motions were taken under advisement. After reviewing the parties’ motions and briefs, and considering the parties’ arguments and supporting evidence, the Court denies the Defendants’ motions for summary judgment, grants the Chambers motion to exclude, and grants in [573]*573part and denies in part MBH’s motion to exclude.

Factual Background and Procedural History

MBH, a North Carolina construction company, filed this copyright infringement action on March 29, 2012. Compl., ECF No. 1. It subsequently filed an amended complaint on April 18, 2012, asserting one cause of action — “Federal Copyright Infringement” — against the Chambers, Wall Tec, and Palmetto Design Group, LLC (“Palmetto”). See Am. Compl. ¶¶ 34-41, ECF No. 7. The amended complaint alleges that the Chambers copied several architectural designs created and registered by Arthur Rutenberg Homes, Inc. (“ARH”). MBH, an ARH franchisee, claims to own the exclusive right to use the designs in Horry County, South Carolina, and, accordingly, to enforce the copyrights. The specific, copyrighted ARH designs that MBH argues were infringed were the “Anastasia 1117,” “Bardmoor II,” and “Waterford 1078” plans.2 Id. at ¶¶ 5-6.

In the interest of brevity, the Court will save a more-detailed discussion of the relevant facts for when each motion is considered below. However, by way of background, suffice it to say that it is undisputed that the Chambers retained Palmetto to draft architectural plans for the construction of their Mediterranean-style home in the Myrtle Beach, South Carolina area. Moreover, it is undisputed that Wall Tec, a local construction company, was hired to build the Chambers’ home using the plans drafted by Palmetto. Prior to the retention of Palmetto, the Chambers had shown interest in several ARH designs and had been in discussions with MBH about building one. MBH claims that the Chambers soon began shopping for an architect and builder who would ultimately assist the Chambers in copying and using the ARH copyrighted plans. MBH continued to provide the Chambers with plans to consider while Palmetto drafted its design. MBH even provided an estimate to build the Chambers’ home using the Palmetto plan; however, it was Wall Tec that provided the Chambers with the less-costly construction and that received the contract build the home. The Chambers’ home was eventually built, and this action resulted. Now before the Court are Wall Tec’s and the Chambers’ motions for summary judgment, filed on July 11, 2013, and July 13, 2013, respectfully. Furthermore, the Court is asked to decide the admissibility of the testimony of MBH’s and Wall Tec’s expert witnesses. Because the Defendants’ motions for summary judgment raise many of the same issues, the Court shall address them first and together.

Defendants’ Motions for Summary Judgment

The Chambers raise two bases for summary judgment in their motion. They contend that MBH has neither the authority to bring this action nor presented a prima facie case of copyright infringement. Chambers’ Memo, in Supp. of Mot. for Summ. J., ECF No. 66-1. Wall Tec raises similar arguments (albeit, more generally); however, it also argues that summary judgment should be granted in its favor because MBH presents no evidence that Wall Tec knew or should have known that the Palmetto plans were copies of the [574]*574ARH designs. Wall Tec’s Memo, in Supp. of Mot. for Summ. J. 4-5, ECF No. 64-1.

Specifically, the Chambers first argue that MBH does not have an exclusive right to the copyrights and thus lacks standing to enforce the copyrights giving rise to this action. Chambers’ Memo, in Supp. of Mot. for Summ. J. 4-6. They point out that “the Franchise Agreement [between ARH and MBH] states that ARH allows other franchisees the right to use the copyrighted material as well.” Id. at 5. They characterize MBH’s right to use the copyrighted plans as a “limited authority” and argue that ARH has not assigned any enforcement rights to MBH. Id. Second, the Chambers argue that MBH has failed to make a prima facie case that Defendants copied the ARH plans. Id. at 6. In particular, the Chambers contend that the plans are not substantially similar and that there is no evidence that they had access to the ARH plans that were allegedly copied. Id. at 6-9. Wall Tec’s motion for summary judgment generally raises these arguments as well. In arguing, however, that MBH has failed to make a prima facie case, Wall Tec argues more specifically that “[MBH] has provided no evidence to support its claim that Wall Tec ... had reason to doubt that the plans presented to it was anything but original work.” Wall Tec’s Memo, in Supp. of Mot. for Summ. J. 4. Wall Tec also claims that there is no evidence that it violated any standard of care in its use of the plans. Id. at 5. The Court shall refer to this argument as the “innocent builder defense.”

In response to these arguments, MBH contends that “the holder of an exclusive licensee of a copyright for a limited geographic area is an owner within the meaning of the [Copyright] Act.” MBH’s Memo, in Opp. to Chambers’ Mot. for Summ. J. 5, ECF No. 74. Additionally, MBH notes that the fact that MBH’s right is limited to Horry County does not defeat its ability to enforce the copyright in that territory. Id. at 6. As such, MBH argues that a genuine issue of fact exists as to whether MBH is an exclusive licensee of ARH’s plans. Id. at 7. Second, MBH argues that sufficient evidence exists to suggest that the Chambers had access to the ARH plans at issue and that the plans are substantially similar. Id. at 7-13. In response to Wall Tec’s argument that Wall Tec was an innocent builder, MBH contends that a plaintiff does not have to prove that the infringement was intentional in order to prevail against a defendant in a copyright infringement action. MBH’s Memo, in Opp. to Wall Tec’s Mot. for Summ. J. 4, ECF No. 69. MBH thus asserts that Wall Tec’s innocent builder defense is based on an incorrect reading of the law and that a builder’s standard of care is irrelevant. Id. at 5. The Court addresses each of these arguments in turn, beginning with the arguments relevant to both motions.

I. Summary Judgment Standard

The Court shall grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P.

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11 F. Supp. 3d 570, 2014 U.S. Dist. LEXIS 42932, 2014 WL 1314241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monterey-bay-homes-llc-v-chambers-scd-2014.