UIRC-GSA Holdings Inc. v. William Blair & Co.

264 F. Supp. 3d 897
CourtDistrict Court, N.D. Illinois
DecidedAugust 28, 2017
DocketCase No. 15-CV-9518
StatusPublished
Cited by8 cases

This text of 264 F. Supp. 3d 897 (UIRC-GSA Holdings Inc. v. William Blair & Co.) 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
UIRC-GSA Holdings Inc. v. William Blair & Co., 264 F. Supp. 3d 897 (N.D. Ill. 2017).

Opinion

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

On April 12, 2016, Plaintiff UIRC-GSA Holdings, Inc. (“UIRC”) brought its Fourth Amended Complaint against Defendants William- Blair & Company (“Blair”) and Michael Kalt, collectively, “Defendants,” alleging copyright infringement in violation of 17 U.S.C. § 101 et seq. and professional negligence. Blair has since filed Counterclaims against UIRC alleging that UIRC’s copyrights are invalid, that UIRC owes Blair profits based on its ownership rights in the registered copyrights, breach of contract, contractual indemnity, and tortious interference. UIRC moved to dismiss Blair’s accounting profits (Count II), contractual indemnity (Count III), breach of contract (Count IV), and tortious interference (Count V) claims pursuant to Federal Rule of Civil Procedure 12(b)(6). (R. 117, UIRC’s Mot. to Dismiss.)1 For the following reasons, the Court grants UIRC’s motion to dismiss Count II without prejudice, denies UIRC’s motion to dismiss Count III, grants in part and denies in part UIRC’s motion to dismiss Count IV, and denies UIRC’s motion to dismiss Count V.

BACKGROUND

UIRC is in the business of acquiring and operating properties leased to the U.S. General . Services Administration (“GSA”) to be financed by the sale of bonds through its subsidiaries. (R. 89, Fourth Am. Compl. ¶ 2.) Blair was UIRC’s investment banker and placement agent in connection with Plaintiff’s bond offering, the proceeds of which were used to acquire a portfolio of real estate properties. (Id. ¶ 6.) This case arises- from Blair’s alleged copyright infringement of UIRC’s bond documents and use of those documents to solicit other clients, including Third-Party Defendants. (Id. ¶¶ 13-16.) In considering this motion, the Court presumes 'familiarity with the background of this action as set forth in the Court’s previous orders and does not recite a detailed background here. The Court will, however, provide a brief factual background, particularly as it pertains to the new allegations in Blair’s Counterclaims.

In its Counterclaims,- Blair alleges that it regularly serves as an investment adviser to “household-name” clients in their efforts to raise capital, such as through the issuance of bonds, including the GSA revenue bonds at issue here. (R. 90, Counterclaim ¶7.) As part of its efforts to help UIRC raise funds through GSA revenue bonds, Blair and UIRC entered into an engagement agreement (the “UIRC Engagement Agreement”) on January 20, 2014 to render certain financial advisory and investment banking services. (7⅛¶ 8.) Under the UIRC Engagement Agreement, Blair was tasked with assisting UIRC with the issuance of GSA revenue bonds for the acquisition of a portfolio of properties leased to the GSA. (1&¶ 9.) Blair was required to assist in the preparation of any solicitation materials, the private place[900]*900ment memorandum used for the deal, and other offering materials. (Id.)

In the Agreement, UIRC acknowledged that “Blair is not and will not be constructed as a fiduciary of [UIRC] and will have no duties or liability to.. .[UIRC].. .by virtue of this agreement, and the retention of Blair hereunder, all of which duties and liabilities are hereby expressly waived.” (Id. ¶ 10.) UIRC also agreed to rely on its own counsel and advisors for “legal, accounting, tax, and similar advice.” (Id.) In the Agreement, UIRC also “knowingly, voluntarily, and irrevocably waive[d] any right it may have to a trial by jury in respect of any claim based upon, arising out of or in connection” with its engagement of Blair. (Id. ¶ 11.) Finally, the Agreement also acknowledges that Blair offered similar services to other clients, providing, “It is understood and agreed that Blair may.. .perform investment banking or other services for, [UIRC] and other entities which are or may be the subject of the engagement contemplated by this agreement. This is to confirm that possible investors identified or contacted by Blair could include entities in respect of which Blah’ may have rendered or may in the future render services.” (Id. ¶ 12.)

On or about January 20, 2014, Blair and UIRC entered into an indemnity agreement (the “UIRC Indemnity Agreement”), which they incorporated by reference into the UIRC Engagement Agreement. (Id. ¶ 13.) In the Indemnity Agreement, UIRC agreed to indemnify and hold harmless Blair “from and against any and all losses, claims, damages, or liabilities (collectively, ‘Losses’) and reasonable expenses incurred by them (including all fees and expenses of Blair’s.. .incurred at [UIRC’s] request or otherwise incurred and reasonably required in connection with the investigation of any pending or threatened claims or preparation for any pending or threatened litigation or other proceedings)... arising out of or relating to Blair’s engagement under such letter agreement.” (7⅛¶ 14.) The Indemnity Agreement also states that UIRC “will not, without the prior written consent of Blair, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder. . .unless such settlement.. .includes an unconditional release of Blair...from all liability arising out of such claim, action, suit, or proceeding.” (Id. ¶ 15.) The Indemnity Agreement also indemnifies “Other Identified Parties” including “the respective members, principals, partners, directors, officers, and employees of Blair and its affiliates.” (Id. ¶ 16.) In connection with Blair’s engagement with UIRC, Blair worked with UIRC and counsel on certain deal documents governing the creation and issuance of GSA revenue bonds on behalf of UIRC. (7<⅞.¶ 17.)

Blair alleges that without its knowledge, UIRC obtained copyrights for the Preliminary Private Placement Memorandum (“PPPM IV,” Copyright Reg. No. TX 8-069-779), a Final Private Placement Memorandum (“FPPM IV,” Copyright Reg. No. TX 8-107-571), and an Indenture of Trust (“Indenture IV,” Copyright Reg. No. TX 8-107-552), collectively, the “Registered Copyrights.” (⅞¶ 19.) Blair alleges that the UIRC Engagement Agreement does not constitute a “work-for-hire” agreement or confer ownership to UIRC of any materials Blam created. (Id. ¶ 20.) Blair claims that the works covered by the Registered Copyrights are a mix of pre-existing material available in the public domain, work product created by UIRC’s and the lenders’ outside counsel, boilerplate, and un-protectable material such as background facts. (7⅛¶ 21.)

Blair also separately represented RRA and Rainier GSA, together “Rainier,” on [901]*901unrelated deals and worked with Rainier and its outside lawyers on placement mem-oranda for Rainier relating to the creation and issuance of revenue bonds relating to different GSA properties. (Id. ¶22.) On October 26, 2015, UIRC filed a copyright infringement lawsuit against Rainier based on its use of placement memoranda that were prepared for Rainier’s own bond offering. (Id.

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Bluebook (online)
264 F. Supp. 3d 897, Counsel Stack Legal Research, https://law.counselstack.com/opinion/uirc-gsa-holdings-inc-v-william-blair-co-ilnd-2017.