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Chicago Building Design, P.C., An Illinois Corporation, and Jeremiah v. Mongolian House

July 31, 2012

CHICAGO BUILDING DESIGN, P.C., AN ILLINOIS CORPORATION, AND JEREMIAH JOHNSON, AN INDIVIDUAL PLAINTIFFS,
v.
MONGOLIAN HOUSE, INC. (D/B/A "PLAN B- CHICAGO), AN ILLINOIS CORPORATION, RYAN GOLDEN, AN INDIVIDUAL, MARK PERRES, AN INDIVIDUAL, AND JOHN A. WILSON, AN INDIVIDUAL. DEFENDANTS.



The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge

MEMORANDUM OPINION AND ORDER

Chicago Building Design ("CBD") and its president, Jeremiah Johnson, brought this suit as a result of a failed business relationship with Mongolian House, Inc. ("Mongolian House"). Plaintiffs' nine-count First Amended Complaint ("FAC") names Mongolian House, its owners, Ryan Golden and Mark Perres; and John Wilson, an architect. Plaintiffs bring various breach of contract claims against Golden and Perres (Counts I through IV); copyright infringement claims against Wilson, Golden, and Perres (Counts V through VII); a claim for quantum meruit against Golden, Perres, and Mongolian House (Count VIII) and a claim of fraud against Golden and Perres (Count IX). All Defendants have brought motions to dismiss arguing that the copyright infringement claims are time-barred. They also ask that I decline to exercise supplemental jurisdiction over the remaining state law claims or dismiss certain of those claims for failure to state a claim upon which relief can be granted. For the reasons that follow, the motions to dismiss are granted to the extent that I find the copyright infringement claims time-barred. I also decline to exercise supplemental jurisdiction over the remaining claims.

I.

According to Plaintiffs' FAC, the allegations of which will be accepted as true for the purposes of ruling on these motions to dismiss, CBD and Johnson offer design, architecture and construction services to bars, restaurants, and night clubs. Golden and Perres, who each had an ownership interest in Mongolian House, retained Plaintiffs' services to renovate the premises at 1635 N. Milwaukee Ave. into a cocktail bar named Plan B -- Chicago ("Plan B").

On April 17, 2006, CBD submitted a project proposal to Golden and Perres for the architectural design of Plan B. CBD submitted a revised proposal on May 4, 2006, which was signed by Golden and Perres on May 9, 2006. The total price of the architectural services was $15,000. This agreement (the "design contract") was eventually signed by all the parties. CBD completed the architectural work on June 7, 2006, and on that day delivered completed architectural blueprints to Golden and Perres.

On June 26, 2006, CBD entered into a contract with Golden and Perres for the performance of construction work related to Plan B (the "construction contract"). Under the terms of the contract, CBD was to be paid $259,100.00. Additionally, in further consideration for the construction work, Johnson was to receive a percentage of equity ownership in Plan B that would entitle him to 15 percent of the profits. CBD completed the construction work on March 17, 2007, and Plan B opened on that date.

To date, Plaintiffs allege, CBD has received approximately $11,000 of the $15,000 due on the design contract. CBD has received approximately $45,000 of the amount due on the construction contract, with $214,000 still owed. Johnson also has not received the promised equity payments.

The copyright infringement counts, which are the basis for this court's jurisdiction over the matter, concern the architectural blueprints. The blueprints are the subject of a copyright issued to CBD and registered on May 1, 2009. (See Dkt. No. 27-6.) Plaintiffs allege that on or about June 8, 2006, they filed the blueprints with the City of Chicago along with an application for a repair and replace permit. The city accepted the application and issued the permit.

Plaintiffs allege that sometime in 2008, an employee of CBD visited the City of Chicago's offices for the purpose of a zoning review and "happened to witness the Blueprints. The CBD employee examined the Blueprints and discovered they had been registered by Wilson." FAC, ¶ 31. Plaintiffs maintain that they never authorized any of the Defendants to retain, copy, modify, distribute or display the blueprints. They contend Defendants modified or copied the blueprints, placed Wilson's name on them, and submitted them to the city with the intent to pass them off as Wilson's in order to secure a full building permit, rather than the repair and replace permit that had been previously issued. That full building permit allowed for interior alterations and increased occupancy levels at Plan B.

On May 8, 2009, the city issued a building permit based on the blueprints. Customarily, after issuing a permit, the city keeps one copy of the blueprints and permit, and distributes two copies to the owner of the property or the architect. Based on this, Plaintiffs believe that on May 8, 2009, the city distributed two copies of the blueprints to Golden, Perres, and/or Wilson. On July 27, 2009, the city inspected the premises at Plan B, and it passed inspection. Blueprints must be reviewed by an inspector during this process, so Plaintiffs allege on information and belief that Golden and Perres used the blueprints to facilitate the inspection. Also upon information and belief, Plaintiffs allege that Defendants continued to use the blueprints for city inspections until January 2012. Plaintiffs attempted to obtain a copy of the blueprints from the city via the Freedom of Information Act, but were told they were exempt from disclosure.

II.

Defendants move to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient facts, accepted as true, "to state a claim for relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although a complaint's factual allegations need not be detailed, they must provide more than "labels, conclusions, or formulaic recitations of the elements of a cause of action, and allege enough to raise a right to relief above the speculative level." Ruiz v. Kinsella, 770 F. Supp. 2d 936, 941--42 (N.D. Ill. 2011)(citing Twombly, 550 U.S. at 555). In ruling on such a motion, the question is whether the facts, accepted as true, "present a story that holds together." Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). Although a statute of limitations defense does not normally form the basis for a motion to dismiss under Rule 12(b)(6), when the allegations of the complaint reveal that relief is barred by the applicable statute of limitations, dismissal is appropriate. Logan v. Wilkins, 644 F.3d 577, 582 (7th Cir. 2011).

III.

Copyright protection "subsists . . . in original works of authorship fixed in any tangible medium of expression . . . from which they can be perceived, reproduced, or otherwise communicated . . . ." McIntosh v. N. Calif. Univ. Enter. Co., 670 F. Supp. 2d 1069, 1086 (E.D. Calif. 2009)(quoting 17 U.S.C. § 102(a)). Works of authorship include "architectural works," see 17 U.S.C. § ...


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