Epcon Group Inc v. Danburry Farms Inc , 28 F. App'x 127 ( 2002 )


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  •                                                                                                                            Opinions of the United
    2002 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    2-5-2002
    Epcon Group Inc v. Danburry Farms Inc
    Precedential or Non-Precedential:
    Docket 0-3283
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    Recommended Citation
    "Epcon Group Inc v. Danburry Farms Inc" (2002). 2002 Decisions. Paper 91.
    http://digitalcommons.law.villanova.edu/thirdcircuit_2002/91
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    NOT PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    ____
    No. 00-3283
    ____
    EPCON GROUP, INC.; EPMARK, INC.
    v.
    DANBURRY FARMS, INC.; DANBURRY FARMS, L.P.;
    CAMBRIDGE MANOR, INC.; BARRINGTON MANOR, INC.;
    RICHARD E. HARTUNG; ASHFORD DEVELOPMENT COMPANY;
    ASHFORD REALTY COMPANY; ASHFORD REALTY, INC.;
    A.M.F. MANAGEMENT, INC.; JOHN DOES (1-10);
    JOHN DOES, INC. (1-10); CAMBRIDGE MANOR, L.P.;
    BARRINGTON MANOR, L.P.; QUADPLEX PARTNERS ONE;
    D.B. DEVELOPMENT, INC.; FRANK TOMINAC; LOUIS MOLNAR
    Cambridge Manor, Inc.; Richard E. Hartung; Ashford Development Company,
    Appellants
    ____
    On Appeal from the United States District Court
    for the Western District of Pennsylvania
    (D.C. Civ. No. 96-1236)
    District Judge: Honorable Gary L. Lancaster
    ____
    Argued January 16, 2002
    BEFORE: SCIRICA, GREENBERG, and BRIGHT,      Circuit Judges
    (Filed: February 5, 2002)
    Frederick N. Egler, Jr.
    Egler, Garrett & Egler
    428 Forbes Avenue
    2100 Lawyers Building
    Pittsburgh, PA 15219
    Michael G. Long (Argued)
    Kimberly W. Herlihy
    Vorys, Sater, Seymour & Pease
    52 East Gay Street
    Columbus, OH 43216
    Attorneys for Appellees, Epmark
    Group,
    Inc. and Epmark, Inc.
    Lawrence G. Zurawsky (Argued)
    Zurawsky & Associates
    600 Allegheny Building
    Pittsburgh, PA 15219
    Lee R. Golden
    P.O. Box 8162
    Pittsburgh, PA    15217
    Attorneys for Appellants
    Roger G. Rulong
    Vollmer, Rulong & Associates, P.C.
    Grant Building
    Suite 1212
    Pittsburgh, PA 15219
    Attorney for Appellee, Frank
    Tominac
    ____
    MEMORANDUM OPINION OF THE COURT
    ____
    GREENBERG, Circuit Judge.
    This matter comes on before the court on appeal from an order of the
    district
    court entering judgment in favor of plaintiffs and against defendants on
    February 24,
    2000, and from an order of the district court entered February 29, 2000,
    denying the
    defendants' motion for a new trial or for judgment as a matter of law.
    For the reasons set
    forth below, we will affirm.
    I. BACKGROUND AND PROCEDURAL HISTORY
    In 1986, Edward Bacome and Philip Fankhauser, the principals of the
    Epcon
    Group, Inc. and Epmark, Inc. (collectively "Epcon"), Ohio corporations,
    began designing
    architectural plans for ranch-style four-plex condominiums. In the late
    1980's, Epcon
    developed several projects in Ohio based on their plans, including
    projects known as Deer
    Run, Greystone Manor, Bayberry and Trotters Chase. Epcon then licensed
    its
    development system, including its architectural plans, to third-party real
    estate
    developers.
    On May 18, 1989, Epcon entered into a licensing agreement with
    Ashford
    Development Company, signed on behalf of Ashford by its vice president,
    Richard E.
    Hartung, for Ashford's use of Epcon's architectural designs, confidential
    information and
    copyright written material in a development called Ashford Manor located
    in Cranberry
    Township, Pennsylvania. See supp. app. at 41a-42a; Appellants' Br. at 6.
    Then, in 1992,
    without a license agreement, Hartung used Epcon's plans to develop a
    second project
    called Cambridge Manor in Springdale Township, Pennsylvania. See supp.
    app. at 59a,
    62a. When Epcon discovered that its plans were used in the latter
    project, it sued a
    number of defendants including appellants Richard E. Hartung, Cambridge
    Manor, Inc.
    and Ashford Development Company (collectively "Hartung").
    Epcon filed its complaint in July 1996 in the district court
    alleging, inter alia, that
    Hartung infringed Epcon's copyright in violation of 17 U.S.C.    101, et
    seq. (the
    "Copyright Act"), and misappropriated its trade secrets. Following a
    trial in February
    2000, the jury on February 11, 2000, returned a verdict in Epcon's favor,
    awarding it
    $114,735.15 in compensatory and $68,571.00 in punitive damages. The court
    entered
    judgment on the verdict on February 24, 2000, and on February 29, 2000,
    denied
    Hartung's motion for a new trial or judgment as a matter of law under Fed.
    R. Civ. P. 50
    and 59. Hartung then timely appealed.
    II. DISCUSSION
    Hartung first asserts that the district court erroneously held that
    Epcon did not
    publish its drawings - a critical point for if it had, it might have lost
    its copyright
    protection. See 17 U.S.C.     405. He argues that the district court,
    finding that the
    evidence showed that Epcon only submitted material to the appropriate
    municipal
    agencies, ignored evidence that Epcon's drawings were distributed to
    "prospective
    contractors, banks and lending institutions, potential home buyers, and
    potential
    licensees." See Appellants' Br. at 5, 8 and 15. He further asserts that
    Epcon submitted its
    drawings to the Columbus, Ohio, City Council for the Deer Run project in
    1986 without a
    copyright notice. See id. at 7-8. Thus, Hartung contends that because
    distribution
    occurred before 1988, see 17 U.S.C.    405(b), and because not all copies
    of Epcon's plans
    bore copyright notices, the district court erred in finding that Epcon did
    not publish its
    work.
    However, Hartung does not cite case law to support his assertion
    that distribution
    limited to necessary third parties, such as subcontractors or lending
    institutions,
    constitutes publication. See Kunycia v. Melville Realty Co., 
    755 F. Supp. 566
    , 574
    (S.D.N.Y. 1990) (stating that distribution "to those persons without whose
    participation
    the plans could not be given practical effect," including contractors,
    landlords and
    building authorities, was not publication). Moreover, at the close of the
    evidence,
    Hartung admitted that the only evidence of publication was Epcon's
    distribution of its
    drawings to government agencies. See app. at 63a, 65a, 66a and 67a. Such
    "judicial
    admissions are binding for the purpose of the case in which the admissions
    are made
    including appeals." Glick v. White Motor Co., 
    458 F.2d 1287
    , 1291 (3d
    Cir. 1972).
    Relying on the representations of Hartung's counsel, the district court
    found that "[t]he
    only evidence of distribution contained in the record of this case
    indicates that plaintiffs
    have submitted copies of the plans to the appropriate governmental
    authorities for
    purposes of obtaining the required building permits. No further evidence
    of further
    distribution to the general public has been introduced." Supp. app. at
    69a-70a.
    Accordingly, we reject Hartung's publication argument.
    Hartung next contends that the district court erred in not setting
    aside the jury's
    award of punitive damages, asserting that the jury improperly may have
    based its award
    on Epcon's copyright infringement claim rather than the misappropriation
    of trade secrets
    claim. Despite his assertion, Hartung recognizes that the district court
    instructed the jury
    that it properly could award punitive damages only if it found liability
    with respect to
    Epcon's trade secrets claim and could not award punitive damages on its
    copyright claim.
    See Appellants' Br. at 9. Nonetheless, he argues that the instructions
    and verdict slip
    "make it impossible to determine the basis for the jury's awarding
    punitive damages in
    the amount of $68,571 and further impossible to determine whether any
    portion thereof
    arose from a finding of liability on the copyright infringement claim."
    Id. at 9. Hartung's
    contention is entirely without merit.
    Hartung neither objected to the jury instructions nor to the form of
    the verdict
    slip. See Appellants' Br. at 9. See also Fashauer v. New Jersey Transit
    Rail Operations,
    Inc., 
    57 F.3d 1269
    , 1288-89 (3d Cir. 1995) (describing procedure for
    preserving objection
    to jury charge); Fed. R. Civ. P. 51 (stating that "a party may not assign
    as error defects in
    jury instructions unless the party distinctly stated its objection before
    the jury retired to
    consider its verdict"). Instead, he cites BMW of North America, Inc. v.
    Gore, 
    517 U.S. 559
    , 
    116 S.Ct. 1589
     (1996), and Shiner v. Moriarty, 
    706 A.2d 1228
     (Pa.
    Super. Ct. 1998),
    arguing that it is "impossible to determine that none of the punitive
    damages were
    awarded as a result of the finding of liability for copyright
    infringement." Appellants' Br.
    at 19.
    BMW of North America, however, stands for the proposition that the
    due
    process clause of the Fourteenth Amendment is violated when a punitive
    damage award is
    "grossly excessive" in relation to a state's legitimate interests in
    punishing unlawful
    conduct and deterring its repetition. See 
    517 U.S. at 568
    , 
    116 S.Ct. at 1595
     (reversing
    $2,000,000.00 punitive damages award where actual harm to plaintiff was
    $4,000.00).
    Accordingly, BMW of North America addresses an issue distinct from that
    here.
    Moreover, the jury awarded Epcon $114,735.15 in compensatory damages and
    $68,571.00 in punitive damages and thus is not a case where the
    relationship of the actual
    harm to the award of punitive damages is so disproportionate as to shock
    this court's
    "constitutional sensibilities." Shiner, 
    706 A.2d at 1242
     (citation
    omitted). Consequently,
    BMW of North America does not aid Hartung even on the point it addressed.
    Likewise, Shiner does not help Hartung. In Shiner, the jury awarded
    punitive
    damages after finding for the plaintiffs on all three counts of their
    complaint. See 
    706 A.2d at 1234
    . However, on appeal, the Superior Court of Pennsylvania
    determined that
    the defendants' motion for judgment notwithstanding the verdict should
    have been
    granted as to two of the three claims. The court recognized that the
    jury's award of
    punitive damages had been made collectively on the basis of all three
    theories of
    recovery, without regard to each specific claim. See 
    id. at 1242
    . Thus,
    the jury could
    properly assess damages only on the sole remaining claim, leading the
    court to hold that
    inasmuch as it was not possible to determine from the verdict slip which
    portion of the
    damages was attributable to that claim, a new trial on damages was
    required.
    In contrast, in this case the jury returned a verdict in Epcon's
    favor on both its
    copyright claim and on its misappropriation of trade secrets claim. Both
    the jury
    instructions and the verdict slip made it clear that the award of punitive
    damages only
    related to the trade secrets misappropriation claim. The court stated:
    "you may not award
    punitive damages with respect to plaintiffs' copyright claim; you may only
    consider
    punitive damages in connection with plaintiffs' claim for misappropriation
    of trade
    secrets." App. at 23a. The verdict slip also linked punitive damages
    only to the trade
    secrets claim: "Question four: The jury, having found in favor of the
    plaintiff and against
    defendant Richard E. Hartung on the misappropriation of trade secrets
    claim, awards
    plaintiffs punitive damages in the amount of $68,571." App. at 25a.
    Regardless of
    whether the verdict slip linked Epcon's claims as to the award of
    compensatory damages,
    the instructions and the verdict slip are both clear and unambiguous with
    regard to
    punitive damages. They do not misstate the law and would not mislead a
    jury, who is
    assumed understand and follow the court's instructions. See, e.g.,
    Loughman v. Consol-
    Pennsylvania Coal Co., 
    6 F.3d 88
    , 105 (3d Cir. 1993) (citations omitted).
    Accordingly,
    the judgment of February 24, 2000, and the order of February 29, 2000 will
    be affirmed.
    ____
    TO THE CLERK:
    Please file the foregoing memorandum opinion.
    /s/Morton I. Greenberg
    Circuit Judge