The opinion of the court was delivered by: Nan R. Nolan United States Magistrate Judge
Magistrate Judge Nan R. Nolan
MEMORANDUM OPINION AND ORDER
This case involving disputes between two former partners is before the Court on Defendants/Counter-Plaintiffs Victoria C. Quade and Quade/Donovan Entertainment, Inc.'s motion for partial summary judgment (Doc. 128). That motion is granted in parted and denied in part.
As a threshold matter, Defendants' submission in response to Plaintiff/Counter-Defendant Maripat Donovan's (Donovan) Statements of Additional Fact (Doc. 148) fails to comply with Local Rule 56.1(b)(3)(B). Under Local Rule 56.1(a), "[a]ll material facts set forth in the statement filed pursuant to section (b)(3)(C) will be deemed admitted unless controverted by the statement of the moving party." In order to controvert the statement of additional facts, the moving party must submit "a concise reply in the form prescribed" in section (b) for a response. Section (b) of Local Rule 56.1 says that a response shall contain "in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." None of Defendants' denials includes any specific references to the record or supporting materials. Because Defendants failed to support their denials of Plaintiff's additional facts with citations to the record, all properly supported facts set forth in Plaintiff's Statements of Additional Fact (Doc. 141) are deemed admitted for purposes of the summary judgment motion. Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817 (7th Cir. 2004) (noting the Seventh Circuit has "repeatedly held that a district court is entitled to expect strict compliance with Rule 56.1.").
The following facts are taken from the parties' Local Rule 56.1 Statements and are undisputed unless otherwise noted. Plaintiff Donovan and Defendant Quade identify themselves as authors and producers of plays performed in professional, amateur and other venues throughout the world. On or about July 12, 1993, Quade and Donovan as coauthors registered the play Late Nite Catechism (LNC) with the United States Copyright Office (Doc. 141 ¶ 7; Doc. 148 ¶ 1). The primary character in LNC is a Roman Catholic nun known as "Sister" ("Sister") (Doc. 141 ¶ 9). "Sister" is a fictional character based on a number of actual nuns (Doc. 141 ¶ 10). Beginning in 1993, and continuing through the present date, LNC has run continuously in theatrical venues in and around Chicago (Doc. 141 ¶ 8).
In June 2000, Donovan and Quade formed Defendant Quade/Donovan Entertainment, Inc. (QDE) as an Illinois corporation to produce LNC (Doc. 148 ¶ 4). QDE is owned in equal shares by Donovan and Quade (Doc. 141 ¶ 3; Doc. 148 ¶ 4). From 1993 to the formation of QDE in 2000, Donovan and Quade produced together only the play LNC (Doc. 148 ¶ 1). From June 2000 to 2005, QDE produced only LNC, consistent with its purpose (Doc. 148 ¶ 5).
Quade asserts that she and Donovan entered into a written partnership agreement (the "Partnership Agreement") in 1995. The Partnership Agreement Quade offers purports to contain Donovan's signature, but Donovan cannot recall ever signing the document (Doc. 148 ¶ 2). Donovan has admitted that she and Quade were partners (Doc. 129-2 ¶ 17), but Donovan believes that her signature on the Partnership Agreement is a forgery. The Partnership Agreement was drafted for use in a prior litigation between Quade and Donovan on one side and several others on the other side who claimed rights in LNC and was discarded when the litigation ended (Doc. 148 ¶ 2). Donovan explains that the Partnership Agreement was "contrived as evidence" because she and Quade believed that the existence of an apparently pre-existing partnership agreement between them would be helpful to their position that the others were not authors. The case for which the Partnership Agreement was drafted was settled without the document being used and there was never a need for it to be signed (Doc. 148 ¶ 2). Neither Donovan nor Quade performed under the Partnership Agreement, and the document was not intended to control the parties' relationship (Doc. 148 ¶ 3).
The copy of the Partnership Agreement offered by Quade surfaced in late October 2004, when Quade's lawyer sent a copy to Donovan's lawyers (Doc. 148 ¶ 16). On November 4, 2004, Donovan notified Quade that Donovan considered the written Partnership Agreement as invalid and of no force or effect (Doc. 148 ¶ 17). On June 16, 2005, Donovan filed a Memorandum and Declaration in this case in which she stated, "I considered our partnership, if one ever existed, to have been terminated . . . " (Doc. 148 ¶ 18).
Accountant Hall Roseth's accounting firm began performing work for Donovan and Quade in connection with LNC in 1996 and that firm has also handled Quade's personal tax matters (Doc. 148 ¶ 6). Roseth testified that he was never aware of any written partnership agreement between Donovan and Quade, but that a partnership had existed and the parties had filed partnership tax returns prior to the incorporation of QDE in 2000. (Doc. 148 ¶ 7; Doc. 129-4 at p. 10-12)). Roseth dealt mostly with Quade in forming QDE and he, Quade and Donovan did not think a partnership was the best way to operate their business (Doc. 148 ¶ 8). Roseth recommended that QDE be formed "in place and stead" of a partnership relationship, and the corporate form of business was chosen over a partnership so otherwise applicable self-employment taxes could be minimized and salaries could be taken instead of profit from LNC productions (Doc. 148 ¶ 9). The idea was that Donovan and Quade would each receive reasonable compensation short of the total profitability of the company. Id.
Donovan has created plays other than LNC that incorporate a "sister" character without any participation by Quade (Doc. 148 ¶ 19). Donovan created plays entitled Sister's Christmas Catechism: The Mystery of the Magi's Gold, Late Night Catechism II: Sometimes We Feel Guilty Because We Are Guilty, and Late Nite IV: 'Til Death Do Us Part, which all include a character of a nun dressed in a habit that is identified as "Sister" (Doc. 141 ¶ 17). Donovan did not share control over licensing of any of her new plays with Quade (Doc. 141 ¶ 22). Donovan has also not shared benefits or expenses related to the use and/or licensing of her new plays with Quade (Doc. 141 ¶ 23).
In 2004, Donovan registered Catechism II Sometimes We Feel Guilty Because We Are Guilty with the United States Copyright Office. (Doc. 141 ¶ 18). The copyright registration for Catechism II Sometimes We Feel Guilty Because We Are Guilty identifies Late Nite Catechism as a derivative work (Doc. 129 Exh. 15). Donovan says she signed the registration but did not fill out the form (Doc. 129 Exh. 10, p. 91).
Quade has created theatrical works derivative of LNC and involving the character "Sister," including the plays known as Put the Nuns in Charge! (PNC) and Sunday School Cinema (Doc. 141 ¶ 24). Quade has ...