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BIEG v. HOVNANIAN ENTERPRISES

June 27, 2001

RICHARD K. BIEG
v.
HOVNANIAN ENTERPRISES, INC.



The opinion of the court was delivered by: McLAUGHLIN, District Judge.

MEMORANDUM

The plaintiff, Richard K. Bieg, is suing the defendant, Hovnanian Enterprises, for copyright infringement relating to architectural drawings prepared by Bieg. The history of the relationship between the two parties and the procedural history of this case are lengthy and complicated. Bieg first began creating architectural drawings for the Hovnanian Corporation in 1991, while working as an employee of the Triad Corporation. During this time he completed technical drawings for numerous Hovnanian projects in New Jersey. In 1993, Bieg decided to begin working as an independent architect, rather than for Triad. He continued to work for Hovnanian in this capacity, making minor revisions on existing drawings.

Presently before the Court are cross-motions for summary judgment. The defendant has filed a motion for summary judgment as well as a motion for partial summary judgment. The plaintiff has filed seven motions for partial summary judgment. The Court grants the defendant's motion for summary judgment, because the Court finds that Bieg is not the owner of the copyrights at issue in this suit and therefore lacks standing to sue under 17 U.S.C. § 501(b).

I. Facts

A. The Parties and the Drawings

The defendant, Hovnanian Enterprises, is engaged in the construction and sale of homes. Plaintiff, Richard Bieg, first began working on Hovnanian Projects in 1991 as an employee of Triad Associates, a Pennsylvania corporation. Bieg, the Secretary/Treasurer of Triad, and Mark Tocanita, the President of Triad, each owned and still own 50% of the shares in Triad Associates. (Def. Ex. 4; Pl.Ex. A)*fn1.

In 1993, Bieg and Tocanita decided to cease practicing architecture under the Triad name and to begin practicing independently. As part of this separation, Bieg and Tocanita agreed that each architect would continue to work for certain Triad clients. Bieg, who had been the architect responsible for Hovnanian projects under Triad, continued to work on Hovnanian projects as an independent architect (Def.Ex. 4). His post-Triad work for Hovnanian consisted of revising and modifying existing technical drawings. Bieg applied for and received certificates of registration — dated July 29, July 30, August 4, and September 28, 1998 — for the technical drawings he had prepared for Hovnanian. (Pl.Ex. B).

Triad Associates has not been dissolved, but has been inactive since the end of 1994. (Def.Ex. 7) Tocanita is currently working as the Chief Corporate Architect for Hovnanian enterprises. (Def.Ex. 4). On August 22, 2000, Tocanita signed an agreement with Hovnanian Enterprises in his capacity as President of Triad, stating that Triad "hereby irrevocably transfers, assigns and conveys to Hovnanian the exclusive copyrights in all drawings, plans, elevations, specifications, and other architectural work product of any kind that Triad ever provided to Hovnanian . . ." (Def.Ex. 12).

B. The 1997 Lawsuit

In March 1997, Bieg filed a complaint against Hovnanian in the United States District Court for the Eastern District of Pennsylvania that was assigned to the Honorable Jay Waldman (No. 97-CV-2113). The complaint consisted of three counts. Counts One and Two alleged that Hovnanian had not paid Bieg for architectural services. Count Three alleged that Hovnanian had breached an agreement to pay a re-use fee for each additional unit type built on the basis of Bieg's architectural drawings. (Def.Ex. 15). On August 31, 1998, the parties agreed to settle the lawsuit. (Def.Ex. 19). Accordingly, the Court entered an Order dismissing the complaint with prejudice pursuant to Local Rule of Civil Procedure 41.1(b). (Def.Ex. 20).

Pursuant to the settlement, Hovnanian was to pay Bieg $70,000 in return for a written release. Subsequently, the parties disagreed over the terms of the release. On October 12, 1998, the plaintiff's attorney sent a letter to the Court, stating that there had been no meeting of the minds regarding settlement and requesting a trial date. (Def.Ex. 25). On October 13, 1998, the Court held a conference in this matter. (Def.Ex. 19). On October 19, 1998, the plaintiff filed an amended complaint asserting copyright infringement claims, as well as a memorandum in support of the motion to amend. In this memorandum, the plaintiff argued that the amendment should relate back to the original Complaint, because it was based on the same conduct or transactions. (Def.Ex. 27).

On the same date as the filing of the Amended Complaint, the plaintiff also filed a second lawsuit, the current copyright infringement suit. On December 30, 1998, the plaintiff filed a "motion to enforce settlement" in the 1997 case, seeking an order vacating the August 31 dismissal and the reentry of an order of dismissal expressly limited to the contract claims asserted in the 1997 complaint. On January 21, 1999, the plaintiff withdrew both his motion to amend and his motion to enforce settlement. (Def.Ex. 31). Due to the withdrawal of these motions, the 1997 case remained closed. The plaintiff then proceeded with the current lawsuit.

C. The Summary Judgment Motions

The defendant raised the following arguments in its motion for summary judgment:

(1) This lawsuit is barred by res judicata, because the claims should have been brought in the 1997 lawsuit;
(2) Bieg cannot sue for infringement, because he does not own the copyrights in question;
(3) Bieg made knowing misrepresentations to the Copyright Office, thereby invalidating his registration certificates, which are a prerequisite to suit;
(4) Certain of Bieg's claims are barred by the statute of limitations;
(5) Certain of Bieg's claims must fail, because they pertain to construction details which are not copyrightable.

In addition, the defendant submitted a motion for partial summary judgment on its counterclaims on the grounds of res judicata and fraudulent ...


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