Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 1 of 30
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF NEW YORK
`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
`MACKENZIE ARCHITECTS, PC
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`Plaintiff,
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`v.
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`1:15-CV-1105
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`VLG REAL ESTATES DEVELOPERS, LLC;
`VICTOR GUSH; FGR ASSOCIATES, LLC;
`CAPTAINS LOOKOUT DEVELOPMENT, LLC;
`DESIGN LOGIC ARCHITECTS, PC;
`CLARK REALTY, LLC; PAUL CLARK;
`FRANK TATE; and ROBERT BUCHER
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`Defendants.
`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
`THOMAS J. McAVOY
`Senior United States Judge
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`DECISION and ORDER
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`Before the Court are a number of motions in this case concerning Plaintiff
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`Mackenzie Architects, PC’s claims that Defendants breached various copyright and
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`contract rights. Defendants seek judgment on the pleadings on Plaintiff’s claims, as
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`well as attorney’s fees. See dkt. ##s 43, 46, 49. Plaintiff moves to strike certain
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`Defendants’ answers and counterclaims. See dkt. # 59. The parties have briefed the
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`issues and the court will resolve them without oral argument.
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`I.
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`BACKGROUND
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`This matter involves alleged copyright infringement and breach of contract
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`between an architect and several groups of developers, builders, and another architect.
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`Relating the role of the various parties will help explain the dispute at the center of this
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`case.
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`A.
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`The Gush Defendants: VLG, Victor Gush, and FGR.
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 2 of 30
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`The Plaintiff in this case is Mackenzie Architects, PC (“Mackenzie”). In
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`December of 2007, Mackenzie entered into a building agreement with three of the
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`above-named defendants: VLG Real Estate Developers, LLC; Victor Gush (controlling
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`member of VLG); and FGR Associates, LLC (collectively, the “Gush Defendants”)
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`Mackenzie provided to the Gush Defendants a set of architectural designs and
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`technical drawings for use on the development of a multi-family residential building
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`called “Captain’s Lookout.” The apartment building would be located on the Hudson
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`River in Cohoes, New York. The agreement fell through shortly thereafter. The parties
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`dispute the reasons why.
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` Mackenzie claims that the Gush Defendants failed to obtain financing for the
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`project. See First Amended Complaint, dkt. # 41, at ¶ 30. The Gush Defendants claim
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`that Mackenzie’s designs were too complex and expensive. See FGR’s Answer to First
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`Amended Complaint, dkt. # 45, at ¶ 32; VLG’s Answer to First Amended Complaint, dkt.
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`# 48, at ¶ 29. Regardless, the Gush Defendants parted ways with Mackenzie.1 Despite
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`being unable to use Mackenzie’s specific designs, Gush was still interested in building a
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`large apartment building on the Hudson River in Cohoes, New York. See Complaint,
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`dkt. # 41, at ¶ 31.
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`B.
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`The Captain’s Lookout Defendants: Clark Realty, Paul Clark, Frank
`Tate, Captain’s Lookout Development, LLC.
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`After the agreement with Mackenzie fell through, Mr. Gush looked elsewhere to
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`complete the project. Id. Mackenzie claims that “[w]ithout any notice to Mackenzie,
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`1 Mackenzie claims that VLG and FGR did not satisfy payment obligations. See
`Complaint, dkt. # 41 at ¶ 30. FGR claims that Mackenzie was compensated more than
`the prevailing market rate for its services. See FGR’s Answer, dkt. # 45 at ¶ 36.
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`2
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 3 of 30
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`without Mackenzie’s authorization or permission, and without any compensation . . . to
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`Mackenzie . . . , Mr. Gush sold the project site, along with the Designs to Clark Realty.”2
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`Id. Clark Realty’s principal owner is Paul Clark. Clark is also the CEO of the building
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`group called “Captain’s Lookout Development, LLC.” Frank Tate is a member of the
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`Captain’s Lookout Development group. Now in charge of the project, these Defendants
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`(the “Captain’s Lookout Defendants”) began work in the Fall of 2013. See First
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`Amended Complaint, dkt. # 41 at ¶ 37.
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`C.
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`The Design Logic Defendants: Design Logic and Robert Bucher
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`The Captain’s Lookout Defendants retained a new architect, Robert Bucher of
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`Design Logic, to create and design an apartment building to be located on the same
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`project site for which Mackenzie had originally designed Captain’s Lookout. Design
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`Logic submitted its design to the City of Cohoes Building and Planning Department in
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`September 2013. Id. at ¶ 33. The record is in the name of Design Logic, with a
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`copyright notice attributable to Design Logic only. Id. Design Logic contends that it
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`“created an entirely original plan for Captain’s Lookout which bears little resemblance to
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`the Mackenzie Plain.” See Design Logic’s Motion for Judgment on the Pleadings,
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`Memorandum of Law, dkt. # 43-7, at 2. Mackenzie claims that Design Logic infringed
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`on its design, as the “overall look and feel of the Captain’s Lookout Design is nearly
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`identical.” See First Amended Complaint, dkt. # 41, at ¶ 36. Mackenzie claims that it is
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`the owner of valid copyrights of the original Captain’s Lookout design, and that Design
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`2 The Gush Defendants claim that Mackenzie conveyed a license to use the
`drawings for the Captain’s Lookout project. See FGR’s Answer, dkt. # 45 at ¶ 39;
`VLG’s Answer, dkt. # 48, at ¶ 36.
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`3
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 4 of 30
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`Logic had access to and infringed on those copyrights. Upon learning that its
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`architectural designs and technical drawings were possibly misappropriated by others,
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`“Mackenzie . . . applied to register the copyright with the United States Copyright
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`Office.” Id. at ¶ 35.
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`D.
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`Mackenzie’s Complaint
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`Mackenzie’s Amended Complaint raises fifteen causes of action:
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`1) Direct Copyright Infringement against the Clark Defendants and Design Logic
`Defendants. (1,2)
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`2) Vicarious Copyright Infringement against the Gush Defendants, the Clark
`Defendants, and the Design Logic Defendants. (3,4,5)
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`3) Contributory Copyright Infringement against the Gush Defendants, the Clark
`Defendants, and the Design Logic Defendants. (6,7,8)
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`4) Removing Copyright Management Information and Providing False
`Management Information against the Gush Defendants, the Clark Defendants,
`and the Design Logic Defendants. (9,10,11,12,13,14)
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`5) Breach of Contract against VLG Real Estate and FGR Associates, LLC. (15)
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`After being served with the Complaint, the Defendants answered and then filed
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`the instant motions for judgment on the pleadings. Plaintiff likewise moved for
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`judgment on the pleadings on the Gush and Captain’s Lookout Defendants’
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`counterclaims, while also seeking to strike portions of their answers and counterclaims.
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`The parties briefed the issues, bringing the case to its present posture.
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`II.
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`LEGAL STANDARD
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`Defendants have moved for judgment on the pleadings. Federal Rule of Civil
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`Procedure 12(c) provides that “[a]fter the pleadings are closed–but early enough not to
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`delay trial–a party may move for judgment on the pleadings.” FED. R. CIV. P. 12(c). “‘In
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`4
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 5 of 30
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`deciding a Rule 12(c) motion, [a court will] apply the same standard as that applicable
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`to a motion under Rule 12(b)(6), accepting the allegations contained in the complaint as
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`true and drawling all reasonable inferences in favor of the nonmoving party.’” Mantena
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`v. Johnson, 809 F.3d 721, 727-28 (2d Cir. 2015) (quoting Burnette v. Carothers, 192
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`F.3d 52, 56 (2d Cir. 1999)). Under this standard, the “‘complaint must contain sufficient
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`factual material, accepted as true, to state a claim to relief that is plausible on its face.’”
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`Johnson v. Rowley, 569 F.3d 40, 44 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S.
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`662, 678 (2009) (internal quotations omitted)). Plaintiff has moved to dismiss
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`Defendants’ counterclaims.
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`In addressing such motions, the Court applies the same standard as used in
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`12(b)(6) and 12(c) motions. Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009).
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`III.
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`ANALYSIS
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`The Court will address each of the various motions in turn.
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`A. Design Logic’s Motion for Judgment on the Pleadings
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` As a general matter, Plaintiff alleges that Design Logic infringed on its Captain’s
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`Lookout design. Plaintiff alleges “while having such access and possession, [Design
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`Logic], without authorization from Plaintiff, with knowledge that such authorization was
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`required, and with good reason to believe that no such authorization existed, copied
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`Plaintiff’s copyrighted design.” See First Amended Complaint, dkt. #41, ¶ 62. Plaintiff
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`argues that its original designs were copied, and used by the Clark Defendants and
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`Design Logic to complete the Captain’s Lookout project. Id. Plaintiff alleges that the
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`“filed drawings and finished project are nearly identical to Plaintiff’s designs.” Id. at ¶
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`5
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 6 of 30
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`63.
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`Defendant Design Logic seeks judgment on the pleadings. Design Logic argues
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`that Plaintiff could not prevail on any of its claims of copyright violations raised against
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`Design Logic even if all facts alleged proved true. Design Logic contends that the
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`designs are not “substantially similar,” and that “Plaintiff cannot establish the [Design
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`Logic] unlawfully infringed upon its copyright.” See Design Logic’s Motion for Judgment
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`on the Pleadings, Memorandum of Law, dkt. # 43-7, at 4. The Court concludes that
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`Design Logic has not met its burden of showing that the “[nonmoving party] can prove
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`no set of facts in support of his claim which would entitle him to relief.” Patel v. Searles,
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`305 F.3d 130, 135 (2d Cir. 2002).
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`In order to establish a claim of copyright infringement, “a plaintiff with a valid
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`copyright must demonstrate that: (1) the defendant has actually copied the plaintiff's
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`work; and (2) the copying is illegal because a substantial similarity exists between the
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`defendant's work and the protectible elements of plaintiff's.” Peter F. Gaito
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`Architecture, LLC v. Simone Development Corp., 602 F.3d 57, 63 (2d Cir. 2010)
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`(quoting Hamil Am. Inc. v. GFI, 193 F.3d 92, 99 (2d Cir.1999)). In this case, the
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`principal issue is whether a substantial similarity exists between Design Logic’s designs
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`for the Captain’s Lookout project and the protectible elements of Plaintiff's design. A
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`plaintiff must first establish actual infringement before he can prevail on a claim for
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`vicarious or contributory infringement. Faulkner v. Nat’l Geographic Enters., 409 F.3d
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`26, 40 (2d Cir. 2005). Defendants’ arguments focus on copying and substantial
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`similarity, regardless of the type of copyright claim.
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`To satisfy the first element of an infringement claim—the “unauthorized copying”
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`6
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 7 of 30
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`element—a plaintiff must show both that his work was “actually copied” and that the
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`portion copied amounts to an “improper or unlawful appropriation.” Castle Rock
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`Entertainment, Inc. v. Carol Pub. Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998). “Actual
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`copying may be established by direct or indirect evidence.” Boisson v. Banian, Ltd.,
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`273 F.3d 262, 267 (2d Cir.2001). Further, a plaintiff may establish copying with
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`circumstantial evidence “by demonstrating that the person who composed the
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`defendant's work had access to the copyrighted material,” Herzog v. Castle Rock
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`Entm't, 193 F.3d 1241, 1249 (11th Cir.1999); see also W alker v. Time Life Films, Inc.,
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`784 F.2d 44, 48 (2d Cir 1986), and that there are similarities between the two works
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`that are “probative of copying,” Repp v. Webber, 132 F.3d 882, 889 (2d. Cir. 1997).
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`Access means that an alleged infringer had a “reasonable possibility”—not simply a
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`“bare possibility”—of seeing or hearing the prior work; access cannot be based on mere
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`“speculation or conjecture.” Gaste v. Kaiserman, 863 F.2d 1061, 1066 (2d Cir.1988).
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`Plaintiff has satisfied the first element of the prima facie copyright infringement
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`claim. Plaintiff’s Complaint contains a sufficient number of circumstances, with respect
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`to access, for the Court to connect with respect to Design Logic’s motion for judgment
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`on the pleadings. The Clark Defendants retained Design Logic after they were
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`allegedly sold (or licensed)3 the Mackenzie design. Despite claiming that Design Logic
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`“started from scratch,” Design Logic’s final design of the apartment complex is similar to
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`Mackenzie’s design in several important ways. Taking Plaintiff’s facts as true, there is a
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`3 The Gush Defendants claim that Mackenzie licensed them to use the building
`design. Mackenzie claims that the Gush Defendants impermissibly sold the design to
`Clark Realty.
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 8 of 30
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`reasonable probability that Design Logic had access to Mackenize’s designs.
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`To satisfy the second element, “[t]he standard test for substantial similarity
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`between two items is whether an ‘ordinary observer, unless he set out to detect the
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`disparities, would be disposed to overlook them, and regard [the] aesthetic appeal as
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`the same.’” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 111 (2d Cir. 2001) (quoting
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`Hamil Am. Inc. v. GFI, 193 F.3d 92, 100 (2d Cir.1999)). In applying the so-called
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`“ordinary observer test,” the Court asks whether “an average lay observer would
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`recognize the alleged copy as having been appropriated from the copyrighted work.”
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`Knitwaves, Inc. v. Lollytogs Ltd. (Inc.), 71 F.3d 996, 1002 (2d Cir.1995). On occasion,
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`though, the Second Circuit has noted that when faced with works “that have both
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`protectible and unprotectible elements,” the analysis must be “more discerning,”
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`Fisher–Price, Inc. v. Well–Made Toy Mfg. Corp., 25 F.3d 119, 123 (2d Cir.1994), and
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`that the Court instead “must attempt to extract the unprotectible elements from our
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`consideration and ask whether the protectible elements, standing alone, are
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`substantially similar,” Knitwaves, Inc., 71 F.3d at 1002.
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`No matter which test is applied, however, the Second Circuit has disavowed any
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`notion that the Court is “required to dissect [the works] into their separate components,
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`and compare only those elements which are in themselves copyrightable.” Id. at 1003.
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`Instead, the Court is principally guided “by comparing the contested design's ‘total
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`concept and overall feel’ with that of the allegedly infringed work,” Tufenkian
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`Import/Export Ventures, Inc. v. Einstein Moomjy, Inc., 338 F.3d 127, 133 (2d Cir.2003);
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`see Knitwaves Inc., 71 F.3d at 1003, as instructed by our “good eyes and common
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`sense,” Hamil Am., 193 F.3d at 102. This is so because “the defendant may infringe on
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 9 of 30
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`the plaintiff's work not only through literal copying of a portion of it, but also by parroting
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`properties that are apparent only when numerous aesthetic decisions embodied in the
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`plaintiff's work of art—the excerpting, modifying, and arranging of [unprotectible
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`components]—are considered in relation to one another.” Tufenkian Import/Export
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`Ventures, Inc., 338 F.3d at 134. Thus, in the end, the Court’s inquiry necessarily
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`focuses on whether the alleged infringer has misappropriated “the original way in which
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`the author has ‘selected, coordinated, and arranged’ the elements of his or her work.”
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`Knitwaves Inc., 71 F.3d at 1004 (quoting Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499
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`U.S. 340, 358 (1991)).
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`With respect to substantial similarity, the Court finds Design Logic’s motion for
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`judgment on the pleadings without merit. The “ordinary observer” test has traditionally
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`been treated as a question of fact. In discrete circumstances, courts have determined
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`substantial similarity on a motion to dismiss or judgment on the pleadings, but generally
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`prefer to wait until the summary judgment stage of the litigation. Given the amount of
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`circumstantial evidence provided by Plaintiff, and given the visual similarity of the
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`designs, the Court finds that Design Logic has not demonstrated that Plaintiff has
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`stated no facts that could entitle Plaintiff to relief. Defendant’s motion will be denied.
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`Design Logic also seeks attorneys fees, contending that Plaintiff’s Complaint was
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`frivolous and that, as prevailing party, Design Logic should be able to recover such fees
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`under the Copyright Act. See 17 U.S.C. § 505 (“the court in its discretion may allow the
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`recovery of full costs by or against any party [and] may also award a reasonable
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`attorney’s fee to the prevailing party as part of the costs.”). Design Logic has not
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`prevailed, and is not entitled to any fees. The motion will be denied in this respect as
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 10 of 30
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`well.
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`B. Captain’s Lookout Defendants’ Motion for Judgment on the Pleadings
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`Defendants Captain’s Lookout Development LLC, FGR Associates LLC, Clark
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`Realty, LLC, Paul Clark and Frank Tate (the “Captain’s Lookout Defendants”) also
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`move for judgment on the pleadings. Defendants argue that Plaintiffs have failed to
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`provide adequate support for their allegations of copyright infringement and breach-of-
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`contract against them.
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`i. Copyright Claims
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`Defendants argue that Plaintiff has not alleged any actual copying and that, even
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`if allegations of actual copying were present, Plaintiff has not alleged substantial
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`similarity. For the same reasons explained above with reference to the Design Logic
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`claims, the Court rejects these arguments.
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`Additionally, the Defendants contend that any use of the Mackenzie Drawings
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`was authorized, and thus no infringement occurred. A copyright “owner may give a
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`license to someone to exploit the work in some way, provided he owns that particular
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`copyright interest.” Davis v. Bilge, 505 F.3d 90, 99 (2d Cir. 2007). “A copyright owner
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`who grants a nonexclusive license to use his copyrighted material waives his right to
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`sue the licensee for copyright infringement.” Graham v. James, 144 F.3d 229, 236 (2d
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`Cir. 1998). This right of use is not absolute, however, because while “[a] valid license . .
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`. immunizes the licensee from a charge of copyright infringement,” that immunity
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`applies only when “the licensee uses the copyright as agreed with the licensor.” Davis,
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`505 F.3d at 100.
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 11 of 30
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`Plaintiff’s Amended Complaint alleges that:
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`25.
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`26.
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`27.
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`The parties understood and agreed that any designs created by
`Mackenzie Architects would be used on a non-exclusive basis by the
`Gush Defendants only for Captain’s Lookout. The parties never agreed or
`even contemplated that the Gush Defendants’ non-exclusive license to
`use the designs was transferable or assignable.
`In a document titled Agreement to Proceed dated December 31, 2007, the
`parties memorialized their agreement that Mackenzie Architects would
`retain its copyrights, and provided that it was a temporary short form
`agreement pending a subsequent “AIA” contract. (Exhibit H).
`The parties exchanged the AIA agreement, (Exhibit A), to supersede an
`earlier executed agreement to proceed. The contract’s written terms
`confirm the oral understanding of Mr. Gush and MacKenzie Architects:
`that Mackenzie Architects retained all copyrights and that FGR was
`granted only a non-exclusive, non-assignable license in exchange for
`payment in full. The contract stated that if the owner failed to fulfill its
`obligations under the contract, it would be considered substantial
`nonperformance of the contract and there would be no license.
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`Amended Complaint at ¶¶ 25-27. Defendants contend that these passages constitute
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`an admission by Plaintiff that their use of the copyrighted material was a licensed one.
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`The Court disagrees. Courts treat licenses as contracts in this context, and “‘[i]n
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`interpreting a contract, the intent of the parties governs. A contract should be
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`construed so as to give full meaning to all of its provisions.’” Chapman v. New York
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`State Div. for Youth, 546 F.3d 230, 236 (2d Cir. 2005) (quoting Am. Express Bank Ltd.
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`v. Uniroyal, Inc., 164 A.D.2d 275, 562 N.Y.S.2d 613, 614 (N.Y. App. Div. 1990)). Here,
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`Plaintiff does not even allege that an agreement existed to provide the Lookout
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`Defendants with a license; the Complaint specifically alleges that any license was
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`granted to the Gush Defendants. Assuming that the Captain’s Lookout Defendants
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`were somehow beneficiaries of that license, the Complaint also alleges that the license
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`could not be assigned to another architect. The Complaint here alleges that the
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`Captain’s Lookout Defendants provided Design Logic with copies of the plans, and that
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 12 of 30
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`Design Logic violated Plaintiff’s copyright in designing the buildings actually
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`constructed. Accepting all of Plaintiff’s allegations as true, the Court finds that nothing
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`in the Complaint indicates that a license immunized any of the Defendants’ infringement
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`of Plaintiff’s copyright.
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`Defendants also argue that Plaintiff’s claims for removing copyright information
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`and providing false management information must also fail. According to Defendants,
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`such allegations “are based on the bald allegation that Design Logic wrongfully copied
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`the Mackenzie Drawings.” Defendants rely on their argument that nothing in the
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`Complaint establishes such copying. As the Court has rejected this argument, the
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`Court will deny the motion to dismiss on these grounds as well.
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`The Lookout Defendants’ motion will thus be denied with respect to the copyright
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`claims. Because the Court finds that Plaintiff has stated a claim for copyright
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`infringement, the Court will also deny Plaintiff’s motion for attorney’s fees pursuant to
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`17 U.S.C. § 505.
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`ii. Contract Claims
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`Defendants next argue that Plaintiff has failed to allege facts sufficient to give
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`rise to a contract claim. Plaintiff does not allege any completed agreement between the
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`parties and therefore cannot make out a contract claim. Even if the claim were properly
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`pled, they insist, the statute of limitations has run.
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`In New York, “[t]he essential elements of a cause of action to recover damages
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`for breach of contract are the existence of a contract, the plaintiff’s performance
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`pursuant to the contract, the defendant’s breach of its contractual obligations, and
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`damages resulting from the breach.” PFM Packaging Mach. Corp. v. ZMY Food
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 13 of 30
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`Packing, Inc., 16 N.Y.S. 3d 298, 2015 N.Y. App. Div. LEXIS 6711 at *2 (2d Dept. Sept.
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`16, 2015). Defendants argue here that Plaintiff has not alleged a contract between the
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`parties. “‘In determining whether the parties entered into a contractual agreement and
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`what were its terms, it is necessary to look . . . to the objective manifestations of the
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`intent of the parties as gathered by their expressed words and deeds.’” Minelli Constr.
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`Co., Inc. v. Volmar Constr., 917 N.Y.S.2d 687, 688, 82 A.D. 3d 720, 721 (2d Dept.
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`2011) (quoting Brown Bros. Elec. Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 399,
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`361 N.E..2d 999 (1977)). “‘Generally, courts look to the basic elements of the offer and
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`acceptance to determine whether there is an objective meeting of the minds.’” Id.
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`(quoting Matter of Express Indus. & Term. Corp. v. New York State Dept. of Transp., 93
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`NY2d 584, 589, 715 N.E.2d 1040 (1999)).
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`New York applies a six-year statute of limitations to contract claims. NY CPLR §
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`213(2). The six-year period “begins to run when a cause of action accrues[.]” Ely-
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`Cruikshank Co., Inc. v Bank of Montreal, 81 N.Y.2d 399, 402, 615 N.E.2d 986, 986
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`(N.Y. 1993). A contract claim in New York accrues “‘from the time of the breach though
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`no damage occurs until later.’” Id. quoting 6 Williston, CONTRACTS § 2004, at 5641
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`(rev. ed. 1938)). “It is well settled law that a contract is not breached until the time set
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`for performance has expired.” Rahmani Corp v. 9 East 96th Street Apartment Corp.,
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`211 A.D.2d 262, 265, 692 N.Y.S.2d 382, 384 (1st Dept. 1995). At the same time, if
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`“‘there has been an anticipatory breach of a contract by one party, the other party may
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`treat the entire contract as broken and may sue immediately for the breach.’” Id.
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`(quoting 22 NYJur2d, Contracts §§ 387-393, at 295). Still, a party need not be aware of
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`the breach for the claim to accrue. T & N PLC v. Fred S. James & Co. of New York,
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`Case 1:15-cv-01105-TJM-DJS Document 70 Filed 09/08/16 Page 14 of 30
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`Inc., 29 F.3d 57, 60 (2d Cir. 1994).
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`The Amended Complaint alleges that “Plaintiff and Defendants FGR and VLG
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`contracted for Plaintiff to create and provide designs for the project Captain’s Lookout,
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`in consideration totaling $383,775, of which $281,175 was due upon completion of
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`design development and construction document creation, the rest to be paid in
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`installments.” Amended Complt. at ¶ 107. Though Plaintiff “performed under the
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`contract,” Defendants did not pay the entire amount due. Id. at ¶ 108. Plaintiff
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`“substantially completed the tasks under the contract” and gave the Gush Defendants
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`drawings and designs in March or April of 2009. Id. at ¶ 28. Plaintiff filed its initial
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`Complaint in this action on September 11, 2015.
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`Plaintiff’s brief points to two documents attached to the Amended Complaint
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`which allegedly raise questions of fact as to whether the statute of limitations has run.
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`The first document is titled “Authorization and Agreement to Proceed.” See Exh. H to
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`Amended Complaint, dkt. # 41-8. That document provides that:
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`Mackenzie Architects, P.C. (MAPC) is hereby requested and authorized by FGR
`Associates, LLC (Owner), to provide professional architectural and/or
`engineering services for Captain’s Lookout Apartments (Project) as described
`below:
`Initial Architectural and Engineering Services for a 138 unit four level housing
`development with parking below, based on design documents dated December
`12, 2007. Services to be in accordance with proposed letter dated December 3,
`2007. This agreement is intended to allow A/E to continue provision of services
`while finalizing terms of overall agreement, and supersedes and absorbs prior
`agreement dated June 8, 2007. This interim agreement is likewise to be
`absorbed and superseded by the overall AIA B141 Agreement once that
`Agreement is in place.
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`Id. The work was to be performed on a lump sum basis for a fee of $180,000 and
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`costs. Id. The agreement further provided that “[t]he term of this authorization
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`commences on the date of Owner’s signed acceptance of this agreement through
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`January 1, 2009.” Id. The agreement also states that “[b]illings for the above will be
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`monthly and are due and payable 30 days from the date of the invoice.” Id. A service
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`is added for unpaid invoices after 90 days. Id. The agreement is dated December 31,
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`2007 and signed by Stephen P. Mackenzie for Mackenzie Architects, P.C. Id. No one
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`signed the agreement for FGR Associates, the “Owner” in the agreement. Id.
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`The second document is titled “AIA Document B151–1997 Part 1: Standard
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`Form of Agreement Between Owner and Architect with Standard Form of Architect’s
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`Services. Exh. A to Amended Complaint, dkt. # 41-1. The agreement is stamped
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`“draft,” and contains as parties Mackenzie Architects and FGR Associates. Id. The
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`agreement contains detailed terms concerning the parties’ obligations, the cost of the
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`work, the ownership of the drawings, resolution of disputes, payments, expenses, and
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`compensation. Id. Included in the terms is a provision providing that “[t]he
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`Authorization and Agreement to Proceed dated June 8, 2007 is hereby absorbed and
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`superseded by this Agreement.” Id. at § 1.4.1.3. The agreement provided for
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`compensation of a “[l]ump sum of $383,775 through completion of Construction
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`Documents for all 140 units.” Id. at § 1.5.1. “Schematic design” was to be “completed
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`initially for all phases.” “Fees for schematic design of all phases and balance of Phase
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`One and Phase Two services . . . shall be $281,175.” Id. “Compensation of $34,200
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`per phase of each subsequent phase shall be paid as that phase is initiated and
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`services completed on that phase.” Id. Payment would be “based on monthly
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`progress.” Id. The version of the agreement provided by Plaintiff is signed only by the
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`Plaintiff. Id.
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`As the Court finds the statute-of-limitations issue dispositive, the Court will
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`decline to address whether Plaintiff has actually pled a breach. With reference to the
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`statute of limitations, Plaintiff argues that there is an issue of fact as to which of these
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`two contracts represents the agreement between the parties. Moreover, the two
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`agreements have different explanations for the statute of limitations. The second
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`agreement provides that:
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`Causes of action between the parties to this Agreement pertaining to acts or
`failures to act shall be deemed to have accrued and the applicable statutes of
`limitations shall commence to run not later than either the date of Substantial
`Completion for acts or failures to act occurring after Substantial Completion. In
`no event shall such statutes of limitations commence to run any later than the
`date when the Architect’s services are substantially completed.
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`Id. at § 1.3.7.3. Plaintiff contends that the date on which any claims accrued is unclear,
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`since Plaintiff received no final certificate of payment and thus cannot know when the
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`breach of contract actually occurred: “because Defendants dispute which agreement
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`the parties operated under and because the date of breach under either contract is an
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`open question of fact, the timeliness of the claim cannot be decided at this stage.”
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`The Court here applies the Rule 12(b)(6) standard, taking notice of the
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`agreements referenced in and incorporated by the Amended Complaint. The question,
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`therefore, is not whether there is a question of fact about whether the statute of
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`limitations ran before Plaintiff filed the Complaint, but whether the Plaintiff has alleged
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`facts sufficient plausibly to allege that the Amended Complaint was timely filed. As
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`explained above, Plaintiff alleges that the breach of contract came when Mackenzie
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`Architects performed under the contract and Defendants refused to pay. As dates for
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`these events, Plaintiff provides only that Mackenzie completed its performance in March
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`or April 2009, and that Defendants refused to pay the amount agreed to. Plaintiff
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`provides no date for this event, but did not file a Complaint until September 2015, well
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`more than six years after Defendants’ obligation to pay supposedly arose. Plaintiff
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`argues that the agreement was more complicated than stated in the Complaint, and
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`cites to the two agreements as proof. According to the Plaintiff, Defendants had a
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`series of obligations to pay and failed to do so. Plaintiff does not, however, allege when
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`those obligations arose. Without such allegations, the Court cannot find that Plaintiff
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`has plausibly alleged facts sufficient to establish that Plaintiff timely filed the breach-of-
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`contract action. The Court will therefore grant the Defendants’ motion with respect to
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`this claim.
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`The Court will grant the motion without prejudice. The Plaintiff has not alleged
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`facts sufficient to establish that the claim was timely filed. At the same time, Plaintiff
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`points to facts which could, if alleged, establish that the statute of limitations had not run
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`when Plaintiff filed the Complaint. Assuming that Plaintiff can allege dates on which
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`Defendants failed in their obligation to pay under the alleged contract, the Court could
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`find that Plaintiff has sufficiently pled a contract claim. The Court will provide Plaintiff
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`with an opportunity to raise that claim.
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`iii. Damages Pursuant to 17 U.S.C. § 412
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`Defendants contend that Plaintiffs are precluded from obtaining statutory
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`damages or attorney’s fees under the Copyright Act. They cite to 17 U.S.C. § 412,
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`which provides in relevant part that:
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`In any action under this title, other than an action brought for a violation of the
`rights of the author under section 106A(a), an action for infringement of the
`copyright of a work that has been preregistered under section 408(f) before the
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`Case 1:15-cv-01105-TJM-DJS