Sedgewick Homes, LLC v. Stillwater Homes, Inc.

          ORDER

          Graham C. Mullen United States District Judge

         This matter is before the Court upon the Individual Defendants' Motions for Attorney's Fees as prevailing parties in this federal copyright lawsuit. Each motion has been fully briefed and this matter is ripe for disposition.

         I. FACTUAL BACKGROUND

         Defendant Stillwater Homes, Inc. (“Stillwater”) built homes for the Individual Defendants, the Bivinses and the Shoemakers, in 2015. Plaintiff Sedgewick Homes, LLC (“Sedgewick”) filed claims against Stillwater for copyright infringement as well as other claims. Sedgewick also sued the Individual Defendants for copyright infringement and contributory infringement.

         The gist of Plaintiff's claims against the Individual Defendants is that after visiting Sedgewick's model home and sales office they allegedly provided to Stillwater certain floor plans and elevations that Sedgewick had made publicly available and asked Stillwater to copy the plans and elevations. Prior to filing and serving the lawsuits against the Individual Defendants, Sedgwick did not contact any of the Individual Defendants to inquire as to whether they had provided any of Sedgwick's information to Stillwater. The Individual Defendants were forced to hire counsel, Mr. Gary Beaver, to defend them. Because Individual Defendants are middle-class families of limited means, Mr. Beaver agreed reduce his billing rate from $410 per hour to $300 per hour.

         Nearly two weeks after counsel had conducted a lengthy Rule 26(f) telephone conference, Sedgewick's counsel offered to stay the claims against the Individual Defendants only if each couple paid Sedgewick $5000, an amount Sedgewick describes as “nominal.” Mr. Beaver thereafter emailed Sedgewick's counsel an 8-page letter with exhibits rejecting the offer to have the Individual Defendants pay for a stay and, instead, laid out the evidence showing that Sedgwick's claims against the Individual Defendants were baseless and “tantamount to economic blackmail on two innocent middle-class families who [Sedgewick] never even bothered to contact about its suspicions prior to filing the lawsuit.” Mr. Beaver included an affidavit from Robert Baldwin, Stillwater's owner, stating that the Individual Defendants had not given him any of Sedgewick's materials.

         In discovery, the Individual Defendants sought to discover any evidence that Sedgwick had showing that either the Bivinses or the Shoemakers had ever provided any Sedgwick plans to Stillwater. No. evidence of that sort was ever produced by Sedgwick to the Individual Defendants.

         After Sedgewick took the depositions of the Individual Defendants, it finally agreed to stay the claims against them without requiring them to pay in return for the stay. As of the date of entry of the stay, each couple had paid Mr. Beaver approximately $7000 in legal fees but owed him substantially more than that.^[1]

         After the Court denied both Sedgewick and Stillwater's motions for summary judgment, a jury trial was held. At the trial, when asked by Defendant's counsel why Stillwater sued the Individual Defendants, David Tucker, the president of Sedgewick, testified as follows:

TUCKER: Well, past experience with other builders shows that if you get the customers involved in this they will push the builder to come up with a speedy resolution.

THE COURT: Wait a minute. You joined them in to pressure this guy [Stillwater's owner]? Is that what you're saying?

TUCKER: Well, it certainly helps.

(Doc. No. 206-1, pp. 87-88).

         After Sedgewick's case in chief, the Court granted in part Stillwater's Rule 50 motion, leaving only the copyright infringement claim. The jury returned a verdict finding that Plaintiff owned a valid copyright; Stillwater had access to Plaintiff's work and there is substantial similarity between the Quail Valley and the Trent, but that Trent plan was created independently by Stillwater. Thereafter, Sedgewick moved to dismiss its claims against the Individual Defendants and the Court ...