The opinion of the court was delivered by: Magistrate Judge Morton Denlow
MEMORANDUM OPINION AND ORDER
The Court conducted a three-day bench trial on September 12,
13, and 14, 2000, to consider LZT/Filliung Partnership, LLP's
complaint that Cody/Braun & Associates, Inc., infringed its
copyright in construction drawings and Cody/Braun's counterclaim
that LZT's copyright is invalid. The Court has carefully
considered the testimony of the three witnesses who appeared at
trial, the numerous exhibits introduced into evidence, the
written submissions and the closing arguments of counsel. The
following constitute the Court's findings of fact and conclusions
of law pursuant to Rule 52(a) of the Federal Rules of Civil
Procedure. To the extent certain findings may be deemed
conclusions of law, they shall also be considered conclusions.
Similarly, to the extent matters contained in the conclusions of
law may be deemed findings of fact, they shall also be considered
findings. Miller v. Fenton, 474 U.S. 104, 113-14, 106 S.C. 445,
1. Plaintiff-Counterdefendant LZT/Filliung Partnership, LLP
("Plaintiff" or "LZT") is an Illinois limited liability
partnership engaged in the practice of architecture. The partners
in LZT are LZT Associates, Inc., a Delaware corporation, James J.
Filliung ("Filliung"), Michael Mistele and Terrence Russell.
Filliung, LZT's managing partner, testified at trial. Filliung
did not prepare any of the construction drawings. He oversaw the
general production of the project.
3. Alden North Shore Associates, LP and its in-house
architectural firm, Alden Design Group, Inc. (collectively
"Alden") are in the business of building and designing nursing
homes and assisted living facilities. Alden is not a party to the
litigation, but is at the center of the dispute which gives rise
to the litigation. Raymond A. Schultz ("Schultz"), an architect
and President of Alden Design Group, Inc., testified at trial.
B. ALDEN-LZT CONTRACT AND ARBITRATION
4. In September, 1996, LZT was retained by Alden to provide
architectural services for the development of a two-story
assisted living facility in Skokie, Illinois (the "North Shore
project"). (PX 4). Prior to bidding on this job, LZT was provided
with design drawings from Schultz. (DX 105). These drawings set
forth the overall concept and the general shape and arrangement
of spaces. Cody/Braun was an unsuccessful bidder on the North
Shore project. Schultz characterized LZT as a drafting service to
prepare construction drawings of the architectural, mechanical,
electrical and plumbing plans. (PX 4, ¶ 2.1.1, 2.3). Alden
separately contracted for the civil, structural, landscaping and
kitchen plans. (PX 4, ¶ 12.1). LZT was to prepare construction
drawings and coordinate the on-site parking, landscaping and
civil engineering plans which were being designed by others. (PX
4., p. 1).
5. The Alden/LZT contract required LZT to follow Schultz's
concept drawings. (PX 4, p. 1). LZT had no responsibility for the
design phase of the project. (PX 4, ¶ 2.2).
6. The Alden/LZT contract specifically dealt with the issue of
copyright and use of the plans to be prepared by LZT as follows:
The Drawings, Specifications and other documents prepared by
the Architect for this Project are instruments of the
Architect's service for use solely with respect to this
Project, and the Architect shall be deemed the author of
these documents and shall retain all common law, statutory
and other reserved rights, including the copyright. The Owner
shall be permitted to retain copies, including reproducible
copies, of the Architect's Drawings, Specifications and other
documents for information and reference in connection with
the Owner's use and occupancy of the Project. The Architect's
Drawings, Specifications or other documents shall not be used
by the Owner or others on other projects, for additions to
this Project or for completion of this Project by others,
unless the Architect is adjudged to be in default under this
Agreement, except by agreement in writing and with
appropriate compensation to the Architect.
(PX 4, ¶ 6.1) (emphasis added).
7. In the course of LZT's work, Schultz provided LZT with a
complete set of plans previously used at Alden's Orland Park
project to be used as a guideline for the North Shore project.
(DX 14). The Orland Park plans contained details and standards
which Alden expected LZT to include in the North Shore project in
order to expedite approval of the project with governmental
bodies. (PX 104). Because Filliung had not personally worked on
the construction plans, there was no reliable testimony to
explain how LZT prepared the plans and what sources it relied
8. David Selinger ("Selinger") was LZT's project manager for
the North Shore project. He and Schultz would communicate and
meet regularly to discuss the progress of the plans. Schultz was
actively involved in the preparation of the plans and he would
periodically send memos, drawings and details to LZT regarding
the plans. (See e.g., DX 56, 80, 83, and 90). Schultz provided a
number of finish details and specifications used in the project.
9. A dispute arose between Alden and LZT regarding the plans.
LZT believed that it was not being paid in accordance with the
contract and that its plans were complete. LZT claimed that Alden
was more than $70,000 in arrears. Alden believed that the plans
were not complete and that LZT had been overpaid, based on the
plan's stage of completion.
10. In an effort to resolve this dispute, an LZT architect
brought a set of plans to review with Schultz. Schultz examined
these plans and determined they were incomplete. (DX 106). These
plans were not left with Schultz and were taken back the same
day, April 7. 1997, to LZT's offices.
11. The dispute between LZT and Alden escalated. In mid-April,
1997, LZT ceased all work on the project because it had not been
paid. Alden terminated LZT several weeks later.
12. Pursuant to the Alden/LZT contract, Alden commenced
arbitration proceedings to recover its architectural fees. On
July 19, 1999, the arbitrator awarded LZT $52,070, finding that
it was entitled to unpaid fees based on 85% completion of the
construction documents. The arbitrator awarded Alden $5,250 for
structural engineering fees, which it had advanced, resulting in
a net award in LZT's favor in the amount of $46,820. (PX 14).
C. ALDEN-CODY/BRAUN CONTRACT
13. Following termination of LZT, Alden contacted Cody/Braun to
discuss whether it would draft construction documents for the
North Shore project.
14. Alden and Cody/Braun entered into a contract dated May 14,
1997 and amended May 23, 1997. (PX 5). Cody/Braun's role was to
produce a complete set of construction documents starting from
Schultz's design drawings. Upon the advice of counsel, and
because of the ongoing dispute between Alden and LZT, Cody/Braun
requested that the agreement be amended to include a hold
harmless agreement as follows:
The ALDEN DESIGN GROUP, INC. agrees to defend, indemnify and
hold harmless CODY/BRAUN & ASSOCIATES, INC. its officers,
directors and employees, and any and all consultants of
CODY/BRAUN & ASSOCIATES, INC. from all claims, damages,
losses and suits, including attorneys fees and expenses,
arising out of or in any way connected with alleged patent,
trademark or copyright infringement related to any work of