App. 1
`
`NOT FOR PUBLICATION
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellant,
` v.
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC;
`BRYCE E. UYEHARA, A.I.A.,
`INCORPORATED; IWAMOTO
`AND ASSOCIATES, LLC; J.
`KADOWAKI, INC.; PALEKANA
`PERMITS LLC; BARGREEN
`ELLINGSON OF HAWAII, INC.,
`
`
`
` Defendants-Appellees.
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellant,
` v.
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC;
`BRYCE E. UYEHARA, A.I.A.,
`INCORPORATED; J.
`KADOWAKI, INC.; IWAMOTO
`AND ASSOCIATES, LLC;
`
`No. 15-15802
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`MEMORANDUM*
`(Filed
`Oct. 26, 2017)
`
`No. 16-15562
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`
`
`* This disposition is not appropriate for publication and is
`
`not precedent except as provided by Ninth Circuit Rule 36-3.
`
`
`
`NOT FOR PUBLICATION
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellant,
` v.
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC;
`BRYCE E. UYEHARA, A.I.A.,
`INCORPORATED; IWAMOTO
`AND ASSOCIATES, LLC; J.
`KADOWAKI, INC.; PALEKANA
`PERMITS LLC; BARGREEN
`ELLINGSON OF HAWAII, INC.,
`
`
`
` Defendants-Appellees.
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellant,
` v.
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC;
`BRYCE E. UYEHARA, A.I.A.,
`INCORPORATED; J.
`KADOWAKI, INC.; IWAMOTO
`AND ASSOCIATES, LLC;
`
`No. 15-15802
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`MEMORANDUM*
`(Filed
`Oct. 26, 2017)
`
`No. 16-15562
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`
`
`* This disposition is not appropriate for publication and is
`
`not precedent except as provided by Ninth Circuit Rule 36-3.
`
`
`
`App. 2
`
`PALEKANA PERMITS LLC;
`BARGREEN ELLINGSON OF
`HAWAII, INC.,
`
`
`
` Defendants-Appellees.
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellee,
` v.
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC;
`BRYCE E. UYEHARA,
`A.I.A., INCORPORATED,
`
`
`
` Defendants-Appellees,
`J. KADOWAKI, INC.,
`
`
`
` Defendant-Appellant,
`IWAMOTO AND
`ASSOCIATES, LLC;
`PALEKANA PERMITS LLC;
`BARGREEN ELLINGSON
`OF HAWAII, INC.,
`
`
`
` Defendants-Appellees.
`
`FROST-TSUJI ARCHITECTS,
`
`
`
` Plaintiff-Appellee,
` v.
`
`
`
`
`
`
`
`No. 16-15799
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`
`No. 16-15802
`D.C. No.
`1:13-cv-00496-
`SOM-BMK
`
`
`
`App. 3
`
`
`
`HIGHWAY INN, INC.;
`HO'OLA MAU, LLC,
`
`
`
` Defendants-Appellants,
`BRYCE E. UYEHARA, A.I.A.,
`INCORPORATED; J.
`KADOWAKI, INC.; IWAMOTO
`AND ASSOCIATES, LLC;
`PALEKANA PERMITS LLC;
`BARGREEN ELLINGSON OF
`HAWAII, INC.,
`
`
`
` Defendants-Appellees.
`
`
`Appeal from the United States District Court
`for the District of Hawaii
`Susan O. Mollway, District Judge, Presiding
`Argued and Submitted October 12, 2017
`U. of Hawaii Manoa
`Before: SCHROEDER, D.W. NELSON, and McKEOWN,
`Circuit Judges.
`
`Frost-Tsuji Architects brought this action against
`
`Highway Inn, Inc., a former client, and Ho‘ola Mau,
`LLC, J. Kadowaki, Inc., Bargreen Ellingson, Inc., Bryce
`E. Uyehara, A.I.A., Inc., Palekana Permits, LLC, and
`Iwamoto & Associates, LLC (collectively, “Highway
`Inn”), alleging that Highway Inn (1) infringed Frost-
`Tsuji’s copyright in architectural plans for a new
`restaurant, and (2) removed Frost-Tsuji’s copyright
`management information (“CMI”) from the plans in
`violation of the Digital Millennium Copyright Act
`(“DMCA”), 17 U.S.C. § 1202(b)(1). The district court
`
`
`
`App. 4
`
`granted summary judgment in favor of Highway Inn.
`The district court then denied Frost-Tsuji’s motions for
`reconsideration of the summary judgment orders. The
`court awarded Highway Inn attorneys’ fees and costs
`incurred in litigating the DMCA claim and in litigating
`the copyright infringement claim after the district
`court’s August 26, 2014 summary judgment order.
`
` We review de novo the order granting summary
`judgment on Frost-Tsuji’s copyright infringement
`claim, Wolfe v. BNSF Ry. Co., 749 F.3d 859, 863 (9th Cir.
`2014), and we affirm for the reasons stated in the
`district court’s order entered August 26, 2014.
`
` We review de novo the order granting summary
`judgment on Frost-Tsuji’s CMI removal claim under
`the DMCA, id., and we affirm for the reasons stated in
`the district court’s order entered November 7, 2014.
`
` We review for abuse of discretion the order
`denying Frost-Tsuji’s motion for reconsideration of the
`November 7, 2014 summary judgment order, 389
`Orange St. Partners v. Arnold, 179 F.3d 656, 661 (9th
`Cir. 1999), and we affirm for the reasons stated in the
`district court’s order entered January 21, 2015.
`
` We review for abuse of discretion the order
`denying Frost-Tsuji’s motion for reconsideration of the
`August 26, 2014 summary judgment order, id., and we
`affirm for the reasons stated in the district court’s
`order entered January 23, 2015.
`
` We review for abuse of discretion the order
`awarding Highway Inn attorneys’ fees and costs under
`
`
`
`App. 5
`
`the Copyright Act, Maljack Productions, Inc. v.
`GoodTimes Home Video Corp., 81 F.3d 881, 889 (9th
`Cir. 1996), and under the DMCA, see Polar Bear
`Productions, Inc. v. Timex Corp., 384 F.3d 700, 719 (9th
`Cir. 2004), and we affirm for the reasons stated in the
`district court’s order entered March 30, 2015.
`
`
`
`AFFIRMED.
`
`Each party shall bear its own costs and fees on
`
`appeal.
`
`
`
`
`
`App. 6
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF HAWAII
`
`
`FROST-TSUJI
`ARCHITECTS,
`
`
`
`
`
`
`
`
`
`
`
`
`
` Plaintiff,
`
` vs.
`
`CIVIL NO.
`13-00496 SOM/BMK
`ORDER GRANTING
`SUMMARY JUDGMENT
`IN FAVOR OF ALL
`DEFENDANTS WITH
`RESPECT TO COUNT
`IV OF THE SECOND
`AMENDED COMPLAINT;
`ORDER DENYING
`PARTIAL SUMMARY
`JUDGMENT WITH
`RESPECT TO COUNT V
`OF THE SECOND
`AMENDED COMPLAINT;
`ORDER DENYING AS
`MOOT DEFENDANT
`J. KADOWAKI, INC.’S
`MOTION FOR PARTIAL
`SUMMARY JUDGMENT
`AS TO STATUTORY
`DAMAGES AND
`ATTORNEYS’ FEES
`PURSUANT TO COUNT
`IV AND MOTION TO
`CONTINUE THAT
`MOTION; ORDER
`DENYING MOTION
`TO FILE THIRD-
`AMENDED COMPLAINT
`
`))
`
`
`)
`)
`)
`)
`)
`HIGHWAY INN, INC.;
`)
`HO`OLA MAU, LLC;
`)
`BRYCE UYEHARA,
`)
`A.I.A., INCORPORATED;
`)
`J. KADOWAKI, INC.;
`)
`FESTIVAL
`)
`MANAGEMENT
`)
`CORPORATION; et al,
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
` Defendants.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`App. 7
`
`ORDER GRANTING SUMMARY JUDGMENT
`IN FAVOR OF ALL DEFENDANTS WITH
`RESPECT TO COUNT IV OF THE SECOND
`AMENDED COMPLAINT; ORDER DENYING
`PARTIAL SUMMARY JUDGMENT WITH
`RESPECT TO COUNT V OF THE SECOND
`AMENDED COMPLAINT; ORDER DENYING
`AS MOOT DEFENDANT J. KADOWAKI, INC.’S
`MOTION FOR PARTIAL SUMMARY JUDGMENT
`AS TO STATUTORY DAMAGES AND ATTORNEYS’
`FEES PURSUANT TO COUNT IV AND MOTION
`TO CONTINUE THAT MOTION; ORDER
`DENYING MOTION TO FILE THIRD-
`AMENDED COMPLAINT
`(Filed Aug. 26, 2014)
`INTRODUCTION.
`I.
`This case involves an architectural firm’s claims
`
`that a restaurant is using the architectural firm’s
`designs without having paid for them. The restaurant’s
`position is that it ended its agreement with the
`architectural firm when the firm refused to work
`within budget, and that it is acting within its rights.
`
`Before the court are competing motions filed by
`
`Plaintiff Frost-Tsuji Architects, on the one hand, and
`Defendants Highway Inn, Inc., and Ho`ola Mau LLC
`(collectively, “Highway Inn”), on the other. Both sides
`seek summary judgment on the copyright claim
`asserted in Count IV of the Second Amended
`Complaint. In a related motion, Defendant J.
`Kadowaki, Inc., seeks a determination that Frost-Tsuji
`is not entitled to statutory damages or attorneys’ fees
`
`
`
`App. 8
`
`in connection with Count IV. Also before the court is a
`motion to continue the Kadowaki motion. The court
`also has before it Highway Inn’s motion for partial
`summary judgment on Count V, which alleges that
`Frost-Tsuji’s copyright management information was
`wrongfully removed from its architectural plans.
`
`Frost-Tsuji, the architectural firm, originally
`
`sought partial summary judgment with respect to
`several portions of Count IV of the Second Amended
`Complaint, see ECF No. 55, but has since clarified that
`its motion is limited to “the issue[ ] of whether any of
`the named defendants had a license to use and/or copy
`[its] copyrighted work after [its] termination.” See ECF
`No. 99. A decision that Defendants have a license
`would moot out other issues raised by Count IV.
`Highway Inn, the restaurant owner, argues that,
`because its use of any of Frost-Tsuji’s work was “fully
`licensed,” Frost-Tsuji cannot maintain any copyright
`claim. See ECF No. 176.
`
`The court agrees that Highway Inn had a non-
`
`exclusive implied license to use the plans created by
`Frost-Tsuji in the construction of and permitting for
`the contemplated restaurant. Accordingly, Highway
`Inn and the other Defendants did not violate any of
`the rights Frost-Tsuji claims in Count IV to have
`had as a copyright owner. Summary judgment is
`therefore granted in favor of Defendants with respect
`to Count IV of the Second Amended Complaint. This
`ruling renders moot Kadowaki’s motion seeking a
`determination that Frost-Tsuji is not entitled to
`statutory damages or attorneys’ fees in connection
`
`
`
`App. 9
`
`with Count IV. Accordingly, that motion and the motion
`seeking to continue that motion are denied without a
`hearing pursuant to Local Rule 7.2(d).
`
`The court denies partial summary judgment in
`
`favor of Highway Inn with respect to Count V of the
`Second Amended Complaint, as Highway Inn fails to
`meet its initial burden as to whether Highway Inn or
`any Highway Inn agent removed the copyright
`management information at issue in that count.
`
`
`II. FACTUAL BACKGROUND
`
`On or about December 1, 2012, Highway Inn hired
`Frost-Tsuji to design and oversee the development of a
`full-service restaurant
`in the Kakaako area of
`Honolulu. Frost-Tsuji was not the first firm to tackle
`this project, having been preceded by DKKY
`Architecture Studio, Inc., whose plans, drawings,
`schematics, and layouts Frost-Tsuji received copies of.
`See Declaration of Monica Toguchi ¶ 4, ECF No. 141-2,
`PageID # 1514; Declaration of Monica Toguchi, ¶ 7,
`ECF No. 177-1, PageID # 1777.
`
`Highway Inn and Frost-Tsuji entered into a letter
`
`agreement dated December 1, 2012. See ECF No. 56-4,
`PageID #s 472-73. Pursuant to that agreement, Frost-
`Tsuji was to “coordinate and manage [Highway Inn’s]
`consultant team and provide for Concept, Schematic,
`Design Development and Construction Document
`Phases.” Id., PageID # 472.
`
`
`
`App. 10
`
`The letter agreement stated, “Any termination of
`
`this Agreement shall be per AIA Standard Contract
`language which is either party may terminate this
`agreement at any time with 7 day written notice.” Id.,
`PageID # 473.
`
`The letter agreement further stated that, “per AIA
`
`standard contract, Architect’s drawings, specifications,
`and all design work are ‘instruments of service’, and all
`copyrights to all items designed are for the specific
`jobsite address only, and design copyrights, formulas,
`custom furniture, fixtures or fabrics remain under the
`ownership of the Architect.” Id.
`
`letter
`the
`that
`The parties contemplated
`
`agreement would be followed by a formal contract.
`Thus, the letter agreement required Frost-Tsuji to
`“convert” the letter agreement “into a Standard AIA
`Short Form Contract between Architect and Owner,
`not later than December 31, 2012.” Id. Frost-Tsuji did
`not meet that deadline. Instead, it waited until
`February 1, 2013, to propose a contract, which Frost-
`Tsuji labeled “DRAFT.” See Declaration of Monica
`Toguchi ¶ 11, ECF No. 177-1, PageID # 1779. Highway
`Inn marked up the proposed contract and returned it
`to Frost-Tsuji on or about March 1, 2013. Frost-Tsuji
`did not make any of the changes Highway Inn sought.
`See Toguchi Decl. ¶ 12-13, PageID #s 1779-80.
`
`The contract proposed by Frost-Tsuji did not
`
`entirely track the letter agreement. For example, the
`letter agreement noted that the project was to end “not
`later than June 15, 2012,” and that Frost-Tsuji would
`
`
`
`App. 11
`
`provide its services “for a NOT TO EXCEED SUM of
`$97,500.” ECF No. 56-4, PageID # 473. The draft
`contract, on the other hand, had a “Substantial
`Completion date” of July 15, 2013, and provided for
`Highway Inn to pay Frost-Tsuji $97,500. See ECF No.
`56-7, PageID #s 504, 513; ECF No. 177-7, PageID
`#s 1892, 1901; ECF No. 177-8, PageID #s 1912, 1921.
`The draft contract also had a different scope of work
`from that described in the letter agreement, and added
`a list of additional services for additional pay. Compare
`ECF No. 56-4, PageID # 472, with ECF No. 177-7,
`PageID #s 1893-1900.
`
`The draft contract proposed by Frost-Tsuji
`
`appears to have been based on AIA Document B101-
`2007, Standard Form of Agreement Between Owner
`and Architect. See ECF No. 56-5. Had the parties
`signed the draft contract as proposed by Frost-Tsuji,
`they would have agreed to the following:
`
`Article 9 TERMINATION OR SUSPENSION
`
`§ 9.1 If Owner fails to make payments to the
`Architect in accordance with this Agreement,
`such failure shall be considered substantial
`nonperformance and cause for termination or,
`at the Architect’s option, cause for suspension
`of performance of services under
`this
`Agreement. . . .
`
`
`
`. . . .
`
`§ 9.4. Either party may terminate this
`Agreement upon not less than seven days’
`written notice should the other party fail
`
`
`
`App. 12
`
`substantially to perform in accordance with
`the terms of this Agreement through no fault
`of the party initiating the termination.
`
`this
`terminate
`§ 9.5. The Owner may
`Agreement upon not less than seven days’
`written notice to the Architect for the Owner’s
`convenience and without cause.
`
`§ 9.6. In the event of termination not the fault
`of the Architect, the Architect shall be
`compensated for services performed prior to
`termination, together with Reimbursable
`Expenses then due and all Termination
`Expenses as defined in Section 9.7.
`
`. . . .
`
`§ 9.8. The Owner’s right to use the Architect’s
`Instruments of Service in the event of a
`termination of this Agreement are set forth in
`Article 7 and Section 11.9.
`
`ECF No. 56-7, PageID #s 511-12; ECF No. 177-7,
`PageID #s 1904-05; ECF No. 177-8, PageID #s 1924-
`25.
`
`
`
`Section 7.3 of the draft contract states:
`
`Upon execution of this Agreement, the
`Architect grants to the Owner a nonexclusive
`license to use the Architect’s Instruments of
`Service solely and exclusively for purposes of
`constructing, using, maintaining, altering and
`adding to the Project, provided that the
`Owner substantially performs its obligations,
`including prompt payment of all sums when
`due, under this Agreement. . . . The license
`
`
`
`App. 13
`
`granted under this section permits the Owner
`to authorize the Contractor, Subcontractors,
`Sub-subcontractors, and material or equipment
`suppliers, as well as the Owner’s consultants
`and separate contractors,
`to reproduce
`applicable portions of the Instruments of
`Service solely and exclusively for use in
`performing services or construction for the
`Project. If the Architect terminates this
`Agreement for cause as provided in Section
`9.4, the license granted in this Section 7.3
`shall terminate.
`
`ECF No. 56-7, PageID # 509; ECF No. 177-7, PageID
`# 1907; ECF No. 177-8, PageID # 1927.
`
`Section 11.9 of the draft contract states, “If the
`
`Owner terminates the Architect for its convenience
`under Section 9.5, . . . the Owner shall pay a licensing
`fee as compensation for the Owner’s continued use of
`the Architect’s Instruments of Service solely for
`purposes of completing, using and maintaining the
`project as follows:” ECF No. 56-7, PageID # 514; ECF
`No. 177-7, PageID # 1902; ECF No. 177-8, PageID
`# 1922. In the standard AIA form that the draft
`contract was based on, there is then a blank for the
`parties to fill in with the licensing fee. See ECF No. 56-
`5, PageID # 491. In the draft contract, Frost-Tsuji filled
`in that blank with the following: “Compensation for
`Basic Service + Additional Services earned to Date of
`Termination + Reimbursable Expenses to Date + 15%
`x Article 11.1 [stating that Highway Inn shall pay
`Frost-Tsuji $97,500 for its services] or $14,625, or the
`remaining amount due on the Contract, whichever is
`
`
`
`App. 14
`
`less.” ECF No. 56-7, PageID # 514; ECF No. 177-7,
`PageID # 1907; ECF No. 177-8, PageID # 1922.
`
`The original letter agreement, while requiring
`
`Frost-Tsuji to “convert” the letter agreement “into a
`Standard AIA Short Form Contract between Architect
`and Owner,” had not expressly incorporated by
`reference the provisions of the AIA Contract into the
`letter agreement. See ECF No. 56-4, PageID # 473. In
`executing the letter agreement, even assuming it had
`incorporated the “Standard AIA” form, Highway Inn
`could not have agreed to the terms of the draft contract
`later proposed by Frost-Tsuji. That is because the draft
`contract included provisions that were not part of the
`standard form. For example, as discussed in the
`preceding paragraph, the standard form had a blank
`that Frost-Tsuji filled in as the license fee in the event
`Highway Inn terminated the draft agreement.
`Highway Inn could not have known what this material
`term of the contract would be when it executed the
`letter agreement, which was silent as to a license fee.
`Nor could it have known then how Frost-Tsuji would
`fill out other blanks in the standard form, or that
`Frost-Tsuji would line out certain provisions of the
`standard form, or change what was stated in the letter
`agreement. See, e.g., ECF No. 177-7, PageID # 1907.
`Frost-Tsuji’s additions to and deletions from the
`standard form indicate that, when it was “converting”
`the
`letter agreement,
`it exercised considerable
`discretion. The present record does not indisputably
`establish what the final contract was to be.
`
`
`
`App. 15
`
` While working with Highway Inn, Frost-Tsuji
`knew that Highway Inn intended to do business as
`another company. Thus, on the version of the draft
`contract that Highway Inn returned to Frost-Tsuji,
`there is a handwritten note stating that the legal
`entity to be listed in the documents was to be Ho`ola
`Mau. Similarly, on February 11, 2013, Wendy Tsuji of
`Frost-Tsuji sent Monica Toguchi of Highway Inn an
`e-mail in which Tsuji asked what the legal name for
`the entity operating the restaurant would be: “your
`new LLC? With dba added?” ECF No. 177-6, PageID
`# 1883. Toguchi responded that day with an e-mail
`stating, “The LLC is Ho`ola Mau but it has not been
`registered.” Id., PageID # 1886.
`
`There is no dispute that Highway Inn never
`
`executed the draft contract. At most, it appears that,
`on or about February 15, 2013, Highway Inn and Frost-
`Tsuji entered into an additional services agreement.
`See ECF No. 56-6. That additional services agreement
`was not the “Standard AIA Short Form Contract
`between Architect and Owner” contemplated by the
`letter agreement. Id.
`
`On or about February 6, 2013, Frost-Tsuji sent
`
`Highway Inn a bill for $25,286.56. The description for
`that bill included, “Scope of Work: A. Basic Services:
`Completion of Schematic Design Phase” and “Fee: A.
`Frank Frost, Wendy Tsuji. Completion of Schematic
`Design Phase.” ECF No. 177-10, PageID # 1935. The
`bill was for “ARCHITECTURAL SERVICES FROM
`JANUARY 1 TO 31, 2013.” Id. It also covered “Partial
`Design Development, Permit, and Bid Document
`
`
`
`App. 16
`
`Phases.” Id. Highway Inn paid this bill the same day
`with a check for $25,286.56. ECF No. 177-11, PageID
`# 1937. Thereafter, Highway Inn paid another bill of
`$17,912. According to a memorandum dated April 29,
`2013, from Frost-Tsuji to its attorney, submitted by
`Frost-Tsuji to this court, Highway Inn paid $59,400 of
`the letter agreement’s maximum of $97,500 for basic
`services, as well as $10,220.98 in “reimbursable
`expenses” and GE tax, and $12,000 for additional
`services. See 56-12, PageID # 527. The memorandum
`stated that Highway Inn owed an additional
`$39,015.98 for basic and additional services, plus taxes
`and reimbursable expenses. Id.
`
`On or about April 25, 2013, Highway Inn’s
`
`attorney sent Frost-Tsuji’s attorney written notice
`that Highway Inn was terminating its contract with
`Frost-Tsuji “effective immediately.” See ECF No. 56-10,
`PageId # 522. Highway Inn did not give the “7 day
`written notice” required by the letter agreement for
`“termination” of the contract. ECF No. 56-4, PageID
`# 473.
`
`The termination letter stated that Highway Inn
`
`was concerned that Frost-Tsuji was going way over
`budget and was going to exceed the maximum fee of
`$97,500. Highway Inn’s letter also expressed concern
`that Wendy Tsuji would “not let go” and would “not
`compromise.” The
`letter complained that Tsuji
`expected to use koa wood, which was not in the budget,
`and that she had “refused to stamp the plans or work
`within the budget despite instructions” from Highway
`Inn. See ECF No. 56-10, PageID # 522.
`
`
`
`App. 17
`
`Toguchi, of Highway Inn, estimates that, at the
`
`time Highway Inn terminated its agreement with
`Frost-Tsuji, Frost-Tsuji had completed “less than one
`third of the services . . . and deliverables promised
`under the December 1, 2012 Letter Agreement.”
`Toguchi Decl. ¶ 20, ECF No. 177-1, PageID #s 1781-82.
`Yet, as described in the preceding paragraphs, four
`days later, Frost-Tsuji was claiming that Highway Inn
`owed additional amounts that would have taken the
`total billed to Highway Inn to $106,000. Of that total,
`$79,000 would have been
`for “basic services,”
`indicating that, with possibly only a third of the work
`done, Frost-Tsuji was already close to the $97,500
`maximum amount stated in the letter agreement,
`assuming that the letter agreement applied only to
`“basic services.”
`
`Frost-Tsuji’s attorney says that, on May 3, 2013,
`
`he gave written notice to Highway Inn that the
`“governing
`contractual
`documents would
`be
`terminated on May 10, 2013, for non-payment.”1
`
`
`
`1 Frost-Tsuji did not originally submit a copy of this
`document in connection with its motion for summary judgement
`with respect to Count IV of the Second Amended Complaint,
`claiming that it was a protected communication under Rule 408
`of the Federal Rules of Civil Procedure. Rule 408 speaks to the
`inadmissibility of evidence relating to settlement negotiations or
`settlement agreements “to prove or disprove the validity or
`amount of a disputed claim or to impeach by a prior inconsistent
`statement or a contradiction.” But even if the document included
`a “compromise offer,” it could be admitted for a purpose unrelated
`to settlement, such as to prove when Frost-Tsuji attempted to
`terminate the letter agreement. In any event, Frost-Tsuji did
`submit the letter of May 3, 2013, in connection with its opposition
`
`
`
`
`App. 18
`
`Declaration of Bennett J. Chin ¶ 6, ECF No. 56-2,
`PageID # 465.
`
`It is unclear from the record how much of the
`
`restaurant, if any, had been built or what materials
`had been ordered based on Frost-Tsuji’s drawings as of
`the date when the letter agreement was terminated.
`For purposes of the motions now before the court, the
`court accepts as true Frost-Tsuji’s contention that
`someone used and altered its plans after the letter
`agreement was terminated. For example, after
`Defendant Bryce Uyehara, A.I.A., Incorporated, was
`hired to replace Frost-Tsuji, Uyehara gave Highway
`Inn a proposal stating that Uyehara would prepare a
`design “based upon architectural and engineering
`work performed by [Frost-Tsuji] and [Highway Inn’s]
`design and engineering consultants.” See ECF No. 186-
`7, PageID # 2049.
`
`Frost-Tsuji claims that the copyright management
`
`information on its plans was removed. For example,
`Drawing A-6, ECF No. 186-10, PageID # 2057,
`contained Frost-Tsuji’s name, address, and telephone
`number on a plan for the restaurant, as well as the
`following: “© ALL DRAWINGS, DIGITAL FILES,
`AND WRITTEN MATERIAL APPEARING HEREIN
`CONSTITUTE
`THE
`ORIGINAL
`AND
`UNPUBLISHED WORKS OF THE ARCHITECT AND
`THE SAME WAY MAY NOT BE DUPLICATED,
`
`
`to Highway Inn’s motion for partial summary judgment with
`respect to Count V of the Second Amended Complaint. See ECF
`No. 186-8, PageID 2051.
`
`
`
`App. 19
`
`USED OR DISCLOSED WITHOUT THE WRITTEN
`CONSENT OF THE ARCHITECT IN ADVANCE OF
`USE.” Frost-Tsuji claims that Uyehara prepared a
`design plan that used much of Frost-Tsuji’s design.
`Frost-Tsuji’s information and copyright language were
`not included in the documents Uyehara generated,
`allegedly based on Frost-Tsuji’s work. Instead,
`Uyehara’s documents bore the Uyehara company
`name, and its plan was stamped by Bryce E. Uyehara.
`See ECF No. 186-9, PageID # 2056.
`
`There is no evidence in the record indicating who,
`
`anyone,
`“removed” Frost-Tsuji’s
`copyright
`if
`management
`information
`from any document.
`Highway Inn denies responsibility for the alleged
`“removal.” See Declaration of Monica Toguchi ¶¶ 4-5,
`ECF No. 135-2, PageID # 1069 (indicating that only
`Toguchi, Russell Ryan, and Sharen Fern-Chong, of
`Highway Inn, had access to Frost-Tsuji’s plan, and that
`declarant did not remove or alter any information on
`Frost-Tsuji’s plans); Declaration of Russell Ryan ¶¶ 4-
`5, ECF No. 135-3, PageID # 1071 (same); Declaration
`of Sharen Fern-Chong ¶¶ 4-5, ECF No. 135-4, PageID
`# 1073 (same).
`
`
`III. SUMMARY JUDGMENT STANDARD.
`
`Summary judgment shall be granted when “the
`movant shows that there is no genuine dispute as
`to any material fact and the movant is entitled to
`judgment as a matter of law.” Fed. R. Civ. P. 56(a)
`(2010). See Addisu v. Fred Meyer, Inc., 198 F.3d 1130,
`
`
`
`App. 20
`
`1134 (9th Cir. 2000). The movants must support their
`position that a material fact is or is not genuinely
`disputed by either “citing to particular parts of
`materials
`in the record,
`including depositions,
`documents,
`electronically
`stored
`information,
`affidavits or declarations, stipulations (including those
`made for the purposes of the motion only), admissions,
`interrogatory answers, or other materials”; or
`“showing that the materials cited do not establish the
`absence or presence of a genuine dispute, or that an
`adverse party cannot produce admissible evidence to
`support the fact.” Fed. R. Civ. P. 56(c). One of the
`principal purposes of summary judgment is to identify
`and dispose of factually unsupported claims and
`defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24
`(1986). Summary judgment must be granted against a
`party that fails to demonstrate facts to establish what
`will be an essential element at trial. See id. at 323. A
`moving party without the ultimate burden of
`persuasion at trial – usually, but not always, the
`defendant – has both the initial burden of production
`and the ultimate burden of persuasion on a motion for
`summary judgment. Nissan Fire & Marine Ins. Co. v.
`Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000).
`
`The burden initially falls on the moving party to
`
`identify for the court those “portions of the materials
`on file that it believes demonstrate the absence of any
`genuine issue of material fact.” T.W. Elec. Serv., Inc. v.
`Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir.
`1987) (citing Celotex Corp., 477 U.S. at 323). “When the
`moving party has carried its burden under Rule 56(c),
`
`
`
`App. 21
`
`its opponent must do more than simply show that
`there is some metaphysical doubt as to the material
`facts.” Matsushita Elec. Indus. Co. v. Zenith Radio
`Corp., 475 U.S. 574, 586 (1986) (footnote omitted).
`
`The nonmoving party must set forth specific facts
`
`showing that there is a genuine issue for trial. T.W.
`Elec. Serv., Inc., 809 F.2d at 630. At least some
`“ ‘significant probative evidence tending to support the
`complaint’ ” must be produced. Id. (quoting First Nat’l
`Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 290
`(1968)). See Addisu, 198 F.3d at 1134 (“A scintilla of
`evidence or evidence that is merely colorable or not
`significantly probative does not present a genuine
`issue of material fact.”). “[I]f the factual context makes
`the non-moving party’s claim implausible, that party
`must come forward with more persuasive evidence
`than would otherwise be necessary to show that there
`is a genuine issue for trial.” Cal. Arch’l Bldg. Prods.,
`Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
`(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475
`U.S. at 587). Accord Addisu, 198 F.3d at 1134 (“There
`must be enough doubt for a ‘reasonable trier of fact’ to
`find for plaintiffs in order to defeat the summary
`judgment motion.”).
`
`All evidence and inferences must be construed in
`
`the light most favorable to the nonmoving party. T.W.
`Elec. Serv., Inc., 809 F.2d at 631. Inferences may be
`drawn from underlying facts not in dispute, as well as
`from disputed facts that the judge is required to
`resolve in favor of the nonmoving party. Id. When
`“direct evidence” produced by the moving party
`
`
`
`App. 22
`
`conflicts with “direct evidence” produced by the party
`opposing summary judgment, “the judge must assume
`the truth of the evidence set forth by the nonmoving
`party with respect to that fact.” Id.
`
`
`IS
`IV. PARTIAL SUMMARY JUDGMENT
`GRANTED IN FAVOR OF DEFENDANTS
`WITH RESPECT TO COUNT IV OF THE
`SECOND AMENDED COMPLAINT.
`The issue before this court with respect to the
`
`countermotions on Count IV of the Second Amended
`Complaint boils down to whether Highway Inn had a
`license to use the architectural plans Frost-Tsuji
`created for Highway Inn’s restaurant even after the
`agreement was terminated.
`
`A license to use Frost-Tsuji’s plans is a defense to
`
`the copyright infringement claim asserted in Count IV
`of the Second Amended Complaint. See Oddo v. Ries,
`743 F.2d 630, 634 n.6 (9th Cir. 1984) (citing 3 M.
`Nimmer, Nimmer of Copyright § 13.04 (1983)). The
`court concludes as a matter of law that Highway Inn
`had a license to use Frost-Tsuji’s architectural plans
`after the termination of the agreement. Partial
`summary
`judgment
`is
`therefore granted
`in
`Defendants’ favor with respect to the copyright claim
`asserted in Count IV of the Second Amended
`Complaint. This ruling renders moot Kadowaki’s
`motion seeking a determination that Frost-Tsuji is not
`entitled to statutory damages and attorneys’ fees with
`
`
`
`App. 23
`
`respect to the copyright claim asserted in Count IV, as
`well as Frost-Tsuji’s motion to continue that motion.
`
`
`
`A. Highway Inn and Its Agents Have a
`Nonexclusive Implied License to Use
`Frost-Tsuji’s Plans.
`Although Frost-Tsuji contends that the December
`
`2012 letter agreement incorporates by reference other
`terms in the standard AIA contract, the letter
`agreement contains no express statement to that
`effect. At best, it states, “Noted that per AIA standard
`contract, Architect’s drawings, specifications, and all
`design work are ‘instruments of service’, and all
`copyrights to all items designed are for the specific
`jobsite address only, and design copyrights, formulas,
`custom furniture, fixtures or fabrics remain under
`ownership of the Architect.” ECF No. 56-4, PageID
`# 473. It then says that Frost-Tsuji “will convert this
`Letter Agreement into a Standard AIA Short Form
`Contract between Architect and Owner, not later than
`December 31, 2012.” Id. As it turned out, the parties
`never executed such a contract. In fact, what Frost-
`Tsuji ended up proposing to Highway Inn was
`materially different from the standard AIA form.
`Frost-Tsuji’s proposal filled in blanks in the form,
`including, for example, a blank relating to a licensing
`fee to continue to use Frost-Tsuji’s architectural
`drawings in the event of termination under certain
`conditions. See ECF No. 56-7, PageID # 514.
`
`
`
`App. 24
`
`incorporate by reference a
`“[T]o effectively
`
`separate writing, or a portion thereof, into a contract,
`‘the language used . . . must explicitly, or at least
`precisely,
`identify
`the written material being
`incorporated and must clearly communicate that the
`purpose of the reference is to incorporate the
`referenced material into the contract (rather than
`merely to acknowledge that the referenced material is
`relevant to the contract, e.g., as background law or
`negotiating history).’ ” Safeway, Inc. v. Nordic PCL
`Constr., Inc., 130 Haw. 517, 527, 312 P.3d 1224, 1234
`(Ct.App.2013) (quoting Northrop Grumman Info. Tech.
`Inc. v. United States, 535 F.3d 1339, 1345 (Fed. Cir.
`2008)). No part of the letter agreement clearly
`incorporates anything by reference. Instead, the letter
`agreement provides that it will be converted into the
`standard AIA form. This court thinks it would be a
`stretch to read a reference to a conversion as
`equivalent to an incorporation, much less to an
`incorporation that has been “clearly communicated.”
`
`Frost-Tsuji argues that, if the letter agreement is
`
`not read as having incorporated the standard AIA
`form, Highway Inn could not have acquired a license to
`use its architectural drawings, because it was the
`terms of the standard AIA form that provided for a
`license. However, nonexclusive licenses “ ‘may be
`granted orally, or may even be implied from conduct.’ ”
`Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir.
`1990) (quoting 3 M. Nimmer & D. Nimmer, Nimmer of
`Copyright § 10.03[A], at 10-36 (1989)). The Ninth
`Circuit has recognized that an implied license is
`
`
`
`App. 25
`
`granted when “(1) a person (the licensee) requests the
`creation of a work, (2) the creator (
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