Keith Karlson v. Red Door Homes, LLC

Case: 12-14176 Date Filed: 01/22/2014 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-14176
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D.C. Docket No. 5:11-cv-01511-IPJ
KEITH KARLSON,
Plaintiff-
Counter Defendant-
Appellant,
versus
RED DOOR HOMES, LLC,
SMA OPERATIONS MANAGEMENT, LLC,
RDH ADVISING, LLC,
Defendants-
Counter Claimants-
Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(January 22, 2014)
Before HILL and COX, Circuit Judges, and MIDDLEBROOKS, ∗ District Judge.
PER CURIAM:
∗
Honorable Donald M. Middlebrooks, United States District Judge for the Southern District of Florida,
sitting by designation.
Case: 12-14176 Date Filed: 01/22/2014 Page: 2 of 5
The Plaintiff, Keith Karlson, challenges on appeal the district court’s grant
of summary judgment in favor of the Defendants. We conclude that the district
court granted summary judgment on a ground the court raised sua sponte—a
ground the Defendants had not argued—without adequate notice to the Defendants
enabling them to respond. This was error. See Imaging Bus. Machines, LLC v.
BancTec, Inc., 459 F.3d 1186, 1191 (11th Cir. 2006).
I. FACTUAL BACKGROUND
Keith Karlson, an artist, prepares drawings of finished homes from blueprint
plans in order to show how those homes will look once built. The Defendants
license custom-home blueprint plans to third parties who then use those plans to
build finished homes. Seeing a need, the Defendants commissioned Karlson to
create illustrations of finished homes from their stock of various blueprint plans.
Karlson obliged and invoiced Defendants for his work. He included in his invoices
a copyright notice stating: “I transfer to you a limited copyright to reproduce the
artwork I have produced for you in unlimited quantities on any media you choose,
royalty-free, but only for use directly by you and [the artwork] may not be
transferred to another business entity without my expressed permission.” (Doc. 39-
4 at 2).
Despite this limitation, Defendants licensed Karlson’s illustrations to third
parties without Karlson’s knowledge or permission. After learning of the
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Defendants’ actions, Karlson filed an application for copyright on his illustrations
and demanded that the Defendants compensate him for his illustrations they had
licensed to third parties. Defendants refused to compensate Karlson and continued
licensing his illustrations.
II. PROCEDURAL POSTURE
After Defendants’ refusal to compensate him, Karlson filed suit against the
Defendants for copyright infringement. Defendants filed a response and
subsequently moved for summary judgment on four grounds. The district court
sua sponte granted summary judgment in favor of the Defendants on the ground
that Karlson granted Defendants an implied non-exclusive license to use his
images. But Defendants had not argued that Karlson had granted them an implied
non-exclusive license to use his images. Karlson filed a motion to alter or amend
the judgment, and the district court denied it. Karlson appeals.
III. DISCUSSION
We review a district court’s grant of summary judgment de novo. Haves v. City
of Miami, 52 F.3d 918, 921 (11th Cir. 1995). Under Federal Rule of Civil
Procedure 56(f), a court may “grant the [summary judgment] motion on grounds
not raised by a party,” but only “[a]fter giving [the parties] notice and a reasonable
time to respond.” Fed. R. Civ. P. 56(f); see also Byars v. Coca-Cola Co., 517 F.3d
1256, 1264–65 (11th Cir. 2008) (stating that “[a]lthough a court may sua sponte
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grant summary judgment on a claim not presented in a summary judgment motion,
the court is required to give notice to the parties that it intends to address the claim
on summary judgment”).
Karlson argues on appeal that the district court committed reversible error by
granting summary judgment in favor of the Defendants. (Appellant’s Br. at 5).
The Defendants disagree, arguing: (1) The district court did not sua sponte grant
summary judgment against Karlson’s claims, but even if it had, doing so was not
erroneous. (Appellees’ Br. at 12). (2) The district court correctly granted summary
judgment on the merits because the evidence showed that Karlson intended the
Defendants use and distribute the rendering. (Appellees’ Br. at 21). (3) The district
court properly granted summary judgment in favor of the Defendants because of
Karlson’s fraud on the copyright office and the “first sale doctrine.” (Appellees’
Br. at 28). We need only address the Defendants’ first argument.
It is clear that the district court granted summary judgment sua sponte on the
implied-license ground. Neither party denies that the district court failed to provide
adequate notice to the parties that it intended to address the implied-license
question when deciding whether to grant summary judgment. Instead, Defendants
argue that the district court did not need to provide formal notice that it was
considering the implied-license issue because the issue was fully developed and the
evidentiary record was complete. (Appellee’s Br. at 15–16).
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Defendants misunderstand our binding precedent. We have always required a
district court to provide some minimum notice to the parties under circumstances
like this. BancTec, 459 F.3d at 1191. And here, the district court provided no
notice to the parties. In those rare instances where we excused the district court
from providing formal notice to the parties, something in the record placed the
parties on notice that the district court could consider the issue when deciding
whether to grant summary judgment. See, e.g., Artistic Entm’t, Inc. v. City of
Warner Robins, 331 F.3d 1196, 1201–02 (11th Cir. 2003) (order requiring parties
to brief argument in question sufficed for notice); Burton v. City of Belle Glade,
178 F.3d 1175, 1204–05 (11th Cir. 1999) (prior summary judgment motion on the
same issue sufficed for notice). Here, nothing in the record placed the parties on
notice that the district court would consider the implied-license issue when
deciding whether to grant summary judgment.
IV. CONCLUSION
Accordingly, we VACATE the district court’s grant of summary judgment and
REMAND the case to the district court for further proceedings consistent with this
opinion.
VACATED and REMANDED.
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