Woodhaven Homes & Re v. Robbins, Douglas E. ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-4158
WOODHAVEN HOMES & REALTY, INC.,
Plaintiff-Appellee,
v.
BARBARA HOTZ and DALE HOTZ,
Defendants-Appellees,
v.
DOUGLAS E. ROBBINS and
ROBBINS ELECTRIC, INC.,
Defendants-Appellants.
____________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 01-C-778—Rudolph T. Randa, Chief Judge.
____________
ARGUED NOVEMBER 12, 2004—DECIDED JANUARY 28, 2005
____________
Before BAUER, MANION, and EVANS, Circuit Judges.
EVANS, Circuit Judge. This case, which began as a minor
copyright infringement dispute, has mushroomed into a
protracted fight over, what else, attorney fees. Woodhaven
2 No. 03-4158
Homes & Realty, Inc., sued a contractor, Robbins Electric,
Inc.,1 and homeowners Dale and Barbara Hotz, claiming
they used Woodhaven’s blueprints without permission to
build the Hotzes’ home. After Robbins prevailed on summary
judgment, it moved for an award of costs and attorney fees
under the Copyright Act, specifically 17 U.S.C. § 505. The
district court denied the request, prompting this appeal.
First, a brief review of the facts. Woodhaven builds and
sells homes. In 1998, it placed a model home in the “Parade
of Homes,” a promotional undertaking sponsored by the
Metropolitan Builders Association of Greater Milwaukee.
The Hotzes toured the home and then paid Woodhaven
$1500 for customized blueprints. There was no written con-
tract between the two. The Hotzes later took these plans to
Robbins, who in turn built the Hotzes’ home in Mukwonago,
Wisconsin, outside the city of Milwaukee. In a written con-
struction contract, the Hotzes warranted that they owned
the plans and agreed to hold Robbins harmless “in any and
all litigation arising out of copyright claims.”
After catching wind of the construction, Woodhaven took
Robbins and the Hotzes to court for copyright infringement
and unjust enrichment. Robbins responded by filing a coun-
terclaim to declare invalid Woodhaven’s purported copyright.
It also filed a cross-claim against the Hotzes for indemnifi-
cation of its litigation expenses. In February of 2003, the
district court entered summary judgment for Robbins re-
garding infringement. In June of 2003, the court entered
summary judgment in favor of the Hotzes on Robbins’ cross-
claim, concluding that the hold-harmless agreement covered
only damages, not attorney fees. Robbins then moved to
recover attorney fees and costs from Woodhaven under 17
1
The complaint also named as a defendant Douglas E. Robbins.
We will refer to both defendants collectively as “Robbins.”
No. 03-4158 3
U.S.C. § 505, a move the district court rejected. Woodhaven
and the Hotzes eventually settled.
The primary issue on appeal is Robbins’ efforts to recover
its attorney fees from Woodhaven under § 505. The Copy-
right Act allows the award of reasonable attorney fees to a
prevailing party. 17 U.S.C. § 505. The district court denied
Robbins’ request in light of the factors outlined by the
Supreme Court in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534
(1994). These nonexclusive factors include “frivolousness,
motivation, objective unreasonableness (both in the factual
and in the legal components of the case) and the need in
particular circumstances to advance consideration of
compensation and deterrence.” Id. at 534 n.19. The court
concluded that Robbins should not be awarded fees because
much of the work performed by its lawyers related to
various defenses that were ultimately never addressed or
resolved.
But in the time period since the district court’s decision,
we issued an opinion clarifying the Fogerty standard. In
Assessment Technologies of WI, LLC v. Wiredata, Inc., 361
F.3d 434, 436 (7th Cir. 2004), we held that prevailing
defendants in copyright cases, like Robbins, are presump-
tively entitled (and strongly so) to recover attorney fees:
[T]he prevailing party in a copyright case in which the
monetary stakes are small should have a presumptive
entitlement to an award of attorneys’ fees. When the pre-
vailing party is the defendant, who by definition receives
not a small award but no award, the presumption in
favor of awarding fees is very strong. For without the
prospect of such an award, the party might be forced in-
to a nuisance settlement or deterred all together from
exercising his rights.
Id. at 437 (internal quotation and citations omitted).
Robbins did prevail, but its victory was costly—it incurred
over $220,000 in legal fees. In this case, like Assessment
4 No. 03-4158
Technologies, awarding attorney fees is appropriate because
Robbins “could not obtain an award of damages from which
to pay his lawyer no matter how costly it was for [it] to
defend against the suit.” 361 F.3d at 437.
The district court evaluated the fees issue without the
benefit of Assessment Technologies. Accordingly, we remand
the case with instructions to evaluate Robbins’ request in
light of Assessment Technologies. While we do not pass judg-
ment on what the award should be, § 505 demands that it
be “reasonable.” And the amount Robbins seeks, over
$220,000, seems quite excessive. This was not a high stakes
case, as Woodhaven claimed only $55,000 in damages. In-
deed, Robbins’ fees nearly surpassed the value of the Hotzes’
home.
Robbins raises two other issues. First, it argues that the
district court erred by failing to grant it relief under 17
U.S.C. § 1325. That provision allows a defendant in a copy-
right action to recover up to $10,000 from a plaintiff who
brings an action “knowing that registration . . . was ob-
tained by a false or fraudulent representation . . . .” But
Robbins failed to conclusively establish that Woodhaven
engaged in fraudulent behavior. The court dismissed
Woodhaven’s complaint for failing to prove infringement. It
never made a finding that Woodhaven engaged in fraud.
Lastly, Robbins asserts that the district court erred by
entering summary judgment for the Hotzes on its claim for
indemnification. But, as the court correctly noted, the hold-
harmless agreement made no mention of attorney fees,
dooming Robbins’ claim. See Hunzinger Constr. Co. v.
Granite Res. Corp., 538 N.W.2d 804, 809 (Wis. App. 1995)
(Wisconsin courts will not construe an obligation to pay
attorney fees unless contract language “clearly and unam-
biguously so provides”).
Accordingly, we AFFIRM in part, VACATE in part, and
REMAND the case for further proceedings on Robbins’ re-
No. 03-4158 5
quest for attorney fees and costs under 17 U.S.C. § 505. No
costs are awarded to either party on this appeal.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—1-28-05