PHYLLIS J. HAMILTON, District Judge.
On May 29, 2019, a score of motions came on for hearing before this court. Plaintiff Rita C. Ho (individually, the "plaintiff") and counter-defendant Claudia S. Ho, Rita Ho's daughter (together with Rita Ho, the "Ho Family"), appeared through their counsel, Allen Baden and Benjamin Schwartz. Allen Baden also made a special appearance on behalf of the counter-defendant Sarah Greene, who is a resident of Hong Kong and who filed a motion challenging service. Defendants and counter-plaintiffs Mark Pinsukanjana, Bryan Yedinak, and Architektur, dba Themes + Projects, formerly dba as Modernbook ("Modernbook," together with Pinsukanjana and Yedinak, the "defendants" or "counter-plaintiffs") appeared through their counsel, Hillary Johns. Having read the papers filed by the parties and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby rules as follows.
Plaintiff Rita Ho, Successor Trustee of the Ho 2012 Revocable Living Trust, was married to the now-deceased photographer Fan Ho (the "decedent"). During his lifetime, the decedent created a body of photographic works of Hong Kong in the 1950s and the present dispute.
Before his death in June 2016, the decedent had a long-lasting business relationship with defendants to sell and publish the Works through the individual defendants' art gallery, Modernbook. Because the photographs were taken over 50 years ago, at a minimum, the decedent and the defendants were required to digitize and touch-up the photographs before they were published. According to defendants, however, the editing of the decedent's Works went beyond mere digitization and clean-up, and, in fact, rose to the level of creating "derivative works" that independently qualify for copyright protection under the Copyright Act. Plaintiff disagrees.
On the other hand, the parties agree that the decedent and the defendants operated under an oral agreement for at least part of their business relationship. The parties also agree that the decedent and the defendants signed two contracts during the many years that they worked together, a Publishing Agreement, signed in March 2006, and a Representing Agreement, signed in October 2012.
The Publishing Agreement called for the publication of a first edition of a monograph comprised of the decedent's photographs. Ex. I. The Publishing Agreement also set forth the decedent and the defendants' fee agreement, various rights, and various limitations on the publication of further editions.
Though it is unclear if there is a dispute on the issue, it appears that the decedent and the defendants executed the October 2012 Representing Agreement to codify the decedent and the defendants' business relationship. Ex. IV. The impetus of the agreement appears to be that the defendants had fallen behind on payments due to the decedent for sales of his Works and related-works pursuant to oral agreements between the decedent and the defendants.
Also in 2012, the individual defendants, signing as "Modernbook as Agent for Ho Fan", executed a written agreement with Asia One Photobook Centre Ltd. HK ("Asia One"). Dkt. 104-7, Ex. III. Sarah Greene signed that agreement as Asia One's representative.
In October 23, 2015, the decedent terminated the Representing Agreement. Dkt. 104-7, Ex. IX (the "Termination Notice").
Lastly, in November 2016, the defendants entered into a licensing agreement with Samsung that purportedly granted Samsung the right to use two Fan Ho photographs as a television screensaver. Dkt. 104-7, Ex. X (the "Samsung Licensing Agreement"). Pinsukanjana signed that agreement for "Themes + Projects on behalf of Fan Ho's estate."
After the decedent's death, Rita Ho filed this copyright and breach of contract-related suit against the defendants asserting the following eleven causes of action: (i) Copyright Infringement under California law and the federal Copyright Act, 17 U.S.C. § 201(d)(1); (ii) False Designation of Origin, Section 43(a) of the Lanham Act, 15 U.S.C. § 1125; (iii) Federal Unfair Competition, Section 43(a) of the Lanham Act, 15 U.S.C. § 1125; (iv) Cybersquatting, Section 43(d) of the Lanham Act, 15 U.S.C. § 1125; (v) Common Law Trade Mark Infringement; (vi) Unfair Business Practices, Cal. Bus. & Prof. Code § 17200 (the "UCL"); (vii) Common Law Unfair Competition; (viii) Breach of Contract; (ix) Wrongful Transfer of Property by Concealment and Undue influence, Cal. Probate Code § 850; (x) Conversion; and (xi) Financial Elder Abuse, Cal. Welfare § 15610.30. Dkt. 7.
On February 9, 2018, defendants answered and asserted nine counterclaims for: (i) Intentional Interference with Contractual Relationship against the counter-defendants; (ii) Declaratory Judgment of copyright over the derivative works against Rita Ho; (iii) Declaratory Judgment that the Representing Agreement is null and void to the extent it purports to convert ownership of the derivative works, and related copyrights, from defendants to the decedent against Rita Ho; (iv) Declaratory Judgment that the Termination Notice is "null and void," and for continuation of the Representing Agreement against Rita Ho; (v) Breach of Contract against Greene; (vi) Fraud against the counter-defendants; (vii) Breach of Fiduciary Duty against the counter-defendants; (viii) Unjust Enrichment against the counter-defendants; (ix) Unfair Competition against the counter-defendants; and (x) Quantum Meruit against Rita Ho. Dkt. 24.
On February 27, 2018, Rita Ho and Claudia Ho, the only counter-defendants who had been served, filed their Answer to the counterclaims. Dkt. 40.
The following motions are now pending before the court: (1) Greene's motion to quash service and her related motion to dismiss; (2) The Ho Family's motion to dismiss Greene for failure to prosecute and to dismiss certain of defendants' counterclaims under Rule 12(b)(6); (3) Defendants' motion for judgment on the pleadings under Rule 12(c); (4) Plaintiff's motion for summary judgment on seven of her claims and on defendants' second counterclaim; and (5) Defendants' motion for summary judgment on two of plaintiff's claims.
The parties agree that counter-plaintiffs attempted to personally serve Greene in Hong Kong. Greene now moves to quash that service, arguing that it was ineffective.
Proper service of process, or waiver thereof, is necessary for the court to "render any judgment against the defendant's person or property."
Rule 4(f) of the Federal Rules of Civil Procedure governs service of process upon a foreign individual defendant. Service may be obtained "by any internationally agreed means of service that is reasonably calculated to give notice, such as those means authorized by the Hague Convention." Fed. R. Civ. P. 4(f)(1). Service pursuant to the Hague Convention is mandatory when serving a foreign defendant in a signatory country to the Hague Convention.
Counter-plaintiffs argue that they effected personal service in compliance with the Hague Convention. Article 10 of the Hague Convention only authorizes personal service if not objected to by the signatory country.
Alternatively, counter-plaintiffs might have shown that Hong Kong's internal rules authorize personal service.
Because counter-plaintiffs have failed to show service was properly effected on Greene—a fact that counter-plaintiffs' counsel all but conceded during the hearing—the court GRANTS Greene's motion and QUASHES service.
Having found that Greene was not properly served, the court turns to whether Greene should be dismissed for counter-plaintiffs' failure to effectuate timely service.
"Federal Rule of Civil Procedure 12(b)(5) authorizes a defendant to move for dismissal due to insufficient service of process."
Although the Federal Rules do not explicitly exempt foreign defendants from the 90-day deadline governing service, they do exempt from this deadline service in a foreign country conducted pursuant to Rule 4(f).
Here, 15 months have passed since counter-plaintiffs named Greene as a counter-defendant in this action.
Accordingly, the court DISMISSES Sarah Greene from this action WITHOUT PREJUDICE. As counterclaim five is asserted only against Greene, that counterclaim is also DISMISSED WITHOUT PREJUDICE.
Next, the court turns to the Ho Family's motion to dismiss six of defendants' counterclaims pursuant to Rule 12(b)(6). In general terms, the motion argues that certain counterclaims must be dismissed because those claims are properly brought by Modernbook, not the individual defendants or Architektur. The Ho Family further argues that because Modernbook's status as a California corporation has been suspended by the California Franchise Tax Board ("FTB suspended"), Modernbook may not prosecute this action and, therefore, the counterclaims must be dismissed.
The court need not reach the merits of that argument because the motion is extraordinarily untimely. By its own terms, Rule 12(b) prohibits the motion: "A motion asserting any" Rule 12(b) defense "must be made before pleading if a responsive pleading is allowed." Fed. R. Civ. P. 12(b);
Defendants move for judgment on the pleadings against all of plaintiff's claims. In general, defendants make two overarching arguments: (1) Plaintiff's copyright infringement claim fails because the complaint does not allege copyright registration and plaintiff's other claims are preempted by the Copyright Act; and (2) Plaintiff's Lanham Act claims fail because plaintiff lacks standing, the complaint does not identify a protectable mark, and there is no possibility of confusion. As more of an aside, defendants argue that plaintiff's claim for conversion fails because the complaint does not identify the allegedly converted property and because defendants returned some images.
As was the case with the Ho Family's motion to dismiss, the court finds no cause to reach the merits of defendants' motion. Defendants filed their motion for judgment on the pleadings on the same day as dispositive motions were due.
Lastly, the court turns to the parties' cross motions for summary judgment. Plaintiff moves for summary judgment on defendants' second counterclaim—for declaratory judgment re copyright over the derivative works—and seven of her own claims: (i) Copyright Infringement; (iv) Cybersquatting, (vi) Unfair Business Practices; (vii) Breach of Contract; (ix) Wrongful Transfer of Property by Concealment and Undue Influence; (x) Conversion; and (xi) Financial Elder Abuse. Defendants move for summary judgment on plaintiff's ninth and eleventh causes of action. The court DENIES both motions in their entireties.
Summary judgment is proper where the pleadings, discovery, and affidavits show that there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those which may affect the outcome of the case.
The moving party for summary judgment bears the initial burden of identifying those portions of the pleadings, discovery, and affidavits which demonstrate the absence of a genuine issue of material fact.
At summary judgment, the court must view the evidence in the light most favorable to the nonmoving party: if evidence produced by the moving party conflicts with evidence produced by the nonmoving party, the judge must assume the truth of the evidence set forth by the nonmoving party with respect to that fact.
In addition, and particularly relevant to the present motions, the moving party "must explain its summary judgment arguments and cannot rely on the Court to sift through the countless exhibits to manufacture a summary judgment argument" for the moving party,
Plaintiff moves for summary judgment on defendants' second counterclaim for declaratory judgment of copyright over the derivative works. The derivative works in this case are alleged to be some unidentified subset of the photographs edited or created after the decedent and the defendants began their business relationship.
The Ninth Circuit has explained:
As neither party addresses the second prong, the court focuses on the first prong of the analysis and finds that disputes of material fact exist. For example, in support of her motion, plaintiff presents the declaration of Jerry Lee, a photographer who worked with the decedent to digitize and retouch the Works.
As at least one dispute of material fact exists regarding whether any "derivative work" exists and whether defendants contributed to the creation of any derivative work, the court DENIES this part of plaintiff's motion for summary judgment.
Plaintiff next moves for summary judgment on her first cause of action for copyright infringement.
To prove copyright infringement, a plaintiff must prove "two things: (1) that [it] owns a valid copyright in [the Subject Work], and (2) that [Defendants] copied protected aspects of [the Subject Work]'s expression."
Here, plaintiff has submitted no evidence suggesting that she possesses a registered copyright over any of the decedent's Works. Indeed, plaintiff's papers concede that point. Nor does plaintiff's counsel's belated representation—unsupported by any evidence submitted to the court—that the Copyright Office has registered one unidentified photograph save plaintiff's motion. As an initial matter, plaintiff has failed to present any evidence of that fact. Relatedly, plaintiff has failed to identify which photograph has been registered. And, putting aside those two problems, plaintiff has failed to provide evidence connecting that unidentified registered work with an act of infringement.
Accordingly, plaintiff's motion for summary judgment on her first claim is DENIED.
Plaintiff's fourth cause of action alleges that defendants' websites— fanhophotography.com and a related Facebook page—constitute cybersquatting under § 43(d) of the Lanham Act. Plaintiff contends that the websites are an attempt by defendants to trade on the goodwill associated with plaintiff's "FAN HO" mark.
"To establish civil liability under the Anti-Cybersquatting Consumer Protection Act (the "ACPA"), 15 U.S.C. § 1125(d), a plaintiff must demonstrate that (1) the defendant registers, traffics in, or uses a domain name that is identical or confusingly similar to a distinctive trademark; and (2) the defendant has a bad faith intent to profit from the mark."
Plaintiff has failed to present evidence in support of either element. First, plaintiff presents no evidence—or even any discussion—about whether the "FAN HO" mark is "distinctive."
Second, plaintiff does not submit sufficient evidence to support the bad faith element of cybersquatting. The ACPA "enumerate[s] nine nonexclusive factors for courts to consider in determining whether bad faith exists."
Because plaintiff has failed to carry her burden, the court DENIES plaintiff's motion with respect to her cybersquatting claim.
Whereas plaintiff's complaint asserts only a single theory for unfair competition— defendants use of the FAN HO mark,
The UCL "prohibits practices that are either `unfair,' or `unlawful,' or `fraudulent.'"
Here, the court finds plaintiff's motion must be DENIED. Though perhaps couched in different terms, plaintiff's first three theories of UCL liability either assume that no derivative works have been created—a proposition for which a material dispute of fact exists—or lack evidentiary support. Plaintiff's fourth theory fails because plaintiff has not shown she has been harmed by Modernbook's continued operation as an FTB suspended corporation with an inactive seller's permit.
Accordingly, because plaintiff has failed to carry her burden, the court DENIES plaintiff's motion with respect to her UCL claim.
Plaintiff argues that defendants have breached the October 2012 Representing Agreement and, therefore, summary judgment should be granted on her breach of contract claim. Specifically, plaintiff contends that defendants: (1) breached § 1.D-F, H, K-L of the Representing Agreement by failing to timely pay the decedent commissions and detail their sales of the Works; (2) breached § 3 of the Representing Agreement by refusing to accept the decedent's termination notice in October 2015 and by failing to pay decedent all due balances; and (3) continued to sell the decedent's Works after the October 2015 Termination Notice, while pocketing the associated revenues.
To prove a breach of contract claim, the plaintiff must show "[1] the existence of a contract, [2] his or her performance of the contract or excuse for nonperformance, [3] the defendant's breach, and [4] resulting damage."
At minimum, the court finds that plaintiff has failed to meet her summary judgment burden by failing to provide any admissible evidence showing defendants breached the Representing Agreement. For that reason, plaintiff's motion for summary judgment on her breach of contract claim is DENIED.
Plaintiff next argues that summary judgment should be granted on claims nine and eleven because defendants wrongfully discarded the property owned by the Trust via flash sales of the Works on defendants' websites and other third-party websites and because defendants unlawfully executed the Samsung Licensing Agreement on behalf of the decedent's estate. Defendants also move for summary judgment on these two causes of action, claiming that plaintiff has no evidence in support of either claim.
"[A] claim for financial elder abuse requires one of the following: (1) taking of property for a `wrongful use,' (2) taking of property with intent to defraud, or (3) taking of property by `undue influence.'"
Plaintiff argues that defendants "discarded" the decedent's property by conducting "flash sales" and by executing the Samsung Licensing Agreement. Assuming that those facts evidence "taking of property"—which is far from obvious itself—there is at least a dispute of material fact as to whether defendants took that property for a "wrongful use," "with an intent to defraud," or by using "undue influence." For that reason, the court DENIES both parties' motions for summary judgment on plaintiff's eleventh cause of action.
For a related reason, the court DENIES the parties' respective motions for summary judgment on plaintiff's ninth cause of action under the California Probate Code. As relevant here, § 859 of the California Probate Code states: "If a court finds that a person . . . has taken, concealed, or disposed of the property by the use of undue influence in bad faith or through the commission of elder . . . financial abuse, as defined in Section 15610.30 . . . the person shall be liable for twice the value of the property recovered by an action under this part." Because plaintiff relies solely upon § 15610.30 to show a violation of the California Probate Code has occurred, and because the court finds that material disputes of fact exist as to plaintiff's § 15610.30 claim, the court must DENY the parties' motion on this dependent claim as well.
Lastly, plaintiff moves for summary judgment on her claim for conversion. Plaintiff argues that upon the decedent's death in June 2016, ownership of the Works reverted to plaintiff and the Trust. Despite that fact, according to plaintiff, defendants continue to sell the Works and have failed to return any Works in their possession.
"Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages[.]"
Here, the only
For the foregoing reasons, the court (1) GRANTS Greene's motion to quash service and DISMISSES Greene from this action WITHOUT PREJUDICE; and (2) DENIES all of the parties' other motions in their entirety.
This case is referred to the ADR unit for mediation. The mediation must be completed within 30 days of this order.
