United States District Court, D. Minnesota
G. Rabuse, Esq., and Holly J. Newman, Esq., DeWitt Mackall
Counse & Moore, S.C., counsel for Plaintiff.
P. Alton, Esq., and Marissa K. Linden, Esq., Gislason &
Hunter LLP, and Jordan B. Weir, Esq., and Robert G. Manly,
Esq., Vogel Law Firm, counsel for Defendants.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE
matter is before the Court on cross-motions for summary
judgment brought by Defendants Swendsrud Construction, Inc.
(“Swendsrud”) and Hilltop Lumber of Glenwood,
Inc. (“Hilltop”) (together,
“Defendants”) (Doc. No. 30) and Plaintiff
Ringdahl Architects, Inc. (“Ringdahl” or
“Plaintiff”) (Doc. No. 36). For the reasons set
forth below, the Court denies Plaintiff's motion and
grants Defendants' motion in part.
August 7, 2012, Ringdahl and Dr. Hamid R. Abbasi entered into
a contract for the design and services related to the
construction of a house and garage for Abbasi (the
“Project”). (Doc. No. 1 (“Compl.”)
¶ 10; Doc. No. 33 (“Alton Decl.”) ¶
III, Ex. 2 (the “Ringdahl-Abbasi Contract”).)
Pursuant to the Ringdahl-Abbasi Contract, Ringdahl was to
perform work described as “Design, Construction
Documents and Construction Administration Services”
pursuant to the following relevant terms:
Fee The total fee, except stated lump sum,
shall be understood to be an estimate, based upon Scope of
Services, and shall not be exceeded by more than
ten percent, without written approval of the Client. Where
the fee arrangement is to be on an hourly basis. [sic] The
rates shall be those that prevail at the time services are
rendered. . . . . . .
Termination of Services This agreement may
be terminated upon 10 days written notice by either party
should the other fail to perform his obligations hereunder.
In the event of termination, the Client shall pay the Design
Professional for all services rendered to the date of
termination, all reimbursable expenses, and reasonable
Ownership of Documents All documents
produced by the Design Professional under this agreement
shall remain the property of the Design Professional and may
not be used by the Client for any other endeavor
without the written consent of the Design Professional.
Contract at 1-2 (emphasis added).) The parties agreed that
the budget for the project would not exceed $1, 000, 000.
(Id. at Amendments.)
Project consisted of two phases: Phase I (construction of a
three story garage with living quarters) and Phase II
(construction of the main living quarters). After multiple
drafts, and input from Abbasi, Ringdahl completed the
construction documents. Ringdahl maintains that these plans
are its copyrighted works and were marked as such. Abbasi
approved Phase I of the project in October 2012, including an
estimated total cost of $1, 224, 794 for both
phases. (Alton Decl. ¶ XIV, Ex. 13.) Abbasi was invoiced
for, and paid, the full amount for Phase I.
2013, the design process for Phase II began and Ringdahl
solicited bids from contractors. Ringdahl and Richard Hardine
of Infinity Development proposed a budget of over $2, 000, 000
for Phase II. Abbasi rejected this bid, as well as additional
subsequent bids. Eventually, Abbasi asked Swendsrud to bid on
the Project, after which Abbasi and Swendsrud agreed to a
total of $1, 072, 000 to construct Phase II. (Alton Decl.
¶ II, Ex. 1 (Findings of Fact, Conclusions of Law, Order
for Judgment, and Judgment (“Order in Initial
Litigation”) at Findings of Fact ¶ 52.) According
to Defendants, shortly after submitting the bid, Mike
Swendsrud, the principal of Swendsrud, received a phone call
from the owner of Tradesman Construction, Inc., offering him
$30, 000 to withdraw his bid. (Id. ¶ 53.) After
learning of the call, Abbasi terminated his relationship with
Plaintiff. (Alton Decl. ¶ XIX, Ex. 18.) In his e-mail
documenting the termination, Abbasi offered to pay Ringdahl
$20, 000 for the rights to the plans and to separate on
“friendly terms” without having to involve
lawyers. (Id.) The offer was not accepted. In
September 2013, Swendsrud began work on Phase II and hired
Hilltop as a subcontractor, and both used the Plans to
complete Phase II.
Abbasi terminated Ringdahl, Ringdahl demanded roughly $96,
000 from Abbasi. Abbasi refused the demand. Ringdahl sued
Abbasi in Minnesota State Court for Breach of Contract,
Account Stated, Mechanic's Lien Foreclosure, and Unjust
Enrichment (the “Initial Litigation”). In the
Initial Litigation, Ringdahl alleged, among other things,
that after terminating the relationship with Ringdahl, Abbasi
“proceeded with construction of the new home upon the
Real Estate and utilized architectural plans prepared by
[Ringdahl] in obtaining the building permit for construction
of such home.” (Alton Decl. ¶ XXIII, Ex. 22 at
19, 2014, Plaintiff registered its final copy of the Plans
for the home with the United States Copyright Office.
(Id. ¶ XXIV, Ex. 23.) On July 14, 2014, counsel
for Plaintiff sent Swendsrud a cease and desist letter.
(Id. ¶ XXV, Ex. 24.) Plaintiff did not add
Swendsrud or Hilltop to the Initial Litigation or assert a
copyright infringement claim.
2015, the state court held a bench trial in the Initial
Litigation, after which the court found in Abbasi's
favor. (Order in Initial Litigation at Findings of Fact
¶ 9 & Conclusions of Law ¶ 2.) Specifically,
the state court made the following findings and conclusions:
• the Ringdahl-Abbasi Contract does not define
“Scope of Services, ” contains incomplete
sentences, does not define material terms and is ambiguous;
• the terms of the Ringdahl-Abbasi Contract are
construed against Ringdahl as the drafter;
• Ringdahl breached the Ringdahl-Abbasi Contract by
failing to administer construction or complete Phase I;
• Ringdahl did not complete any “Construction
Administration Services” related to the design,
construction documents, or bidding related to Phase II.
(Id. at Findings of Fact ¶ 9 & Conclusions
of Law ¶¶ 2-7.) In an attached Memorandum, the
judge in the Initial Litigation rejected Ringdahl's
assertion that Abbasi was obligated to pay Ringdahl for Phase
II under the contract, explaining that Ringdahl breached the
Contract, and that its breach precludes Ringdahl's claim
for any subsequent breach by Abbasi.
April 22, 2016, Plaintiff filed this action, asserting claims
for copyright infringement, unfair competition under the
Lanham Act, violations of the Minnesota Deceptive Trade
Practices Act, Minn. Stat. § 325 D.44, et seq.,
(“MUDTPA”), and conversion. In an agreement dated
July 28, 2016, Abbasi agreed to fully defend and indemnify
Defendants against the claims in the lawsuit.
parties filed cross-motions for summary judgment, the merits