Facts

Plaintiff C&M Communique Inc. claimed to own exclusive copyrights in television commercial promoting for the Rimrock Project, website content for the Rimrock Project's website, website content for Singleton Project's website, website content for MasterCraft's corporate website, the logo for "the Estates at Singleton Hills," a sales brochure for the Rimrock project, and several other materials and designs created by C&M. C&M had registered copyrights in each of these before suing Mastercraft Builders, Daniel Thompson, Rimrock Springs LLC, and Calimesa Springs LLC, alleging copyright infringement, breach of contract, open book account, account stated, quantum meruit, and unjust enrichment. Mastercraft brought a cross-action against C&M CEO Christina Walters and C&M, alleging breach of written contract, fraud, intentional and negligent misrepresentation, and intentional concealment.

PLAINTIFF'S CONTENTIONS:
C&Mclaimed that in May 2006, it entered into an agreement with Mastercraft whereby Mastercraft would advertise and market the Rimrock Project for $1,500 per month. C&M claimed that C&M and Thompson talked about works that C&M could provide at an extra cost and C&M gave Thompson and MasterCraft a summary of costs. C&M alleged that, in June 2006, it agreed to create the relevant copyrighted works for MasterCraft and MasterCraft entered into product agreements for itself and on behalf of Rimrock and Singleton. Further, C&M asserted that it owned the copyright materials at all relevant times and allowed defendants to utilize the material in marketing and sales efforts, which C&M bolstered with media placement and management activities. C&M alleged that, beginning in late 2007, defendants failed to pay outstanding invoices and failed to honor promises to pay. In September 2008, C&M sent Thompson And MasterCraft a letter terminating defendants' license to use the copyrighted materials. According C&M, defendants continued to use the materials after receiving the letter.

DEFENDANT'S CONTENTIONS:
Defendants argued that they owned some or all of the copyrighted works. Defendants further alleged that because they had the exclusive licenses to use the celebrity names and images contained in the commercial and website, they were at minimum, joint holders of the copyrights.

In their counterclaim, defendants contended that C&M and Walters falsely stated the cost of C&M's services provided, had billed separately for services covered by the flat-fee contract, and had received kick -backs for vendors that C&M hired while acting as Defendants' agent, and who were paid for by defendants.

Damages

Plaintiffs sought to enjoin defendants from using the copyright materials and sought an accounting of profits and benefits defendants derived from using the materials. They also sought $135,572 in damages from MasterCraft, $14,940 from Singleton, and $108,482 from Rimrock. Mastercraft sought $680,000, attorneys fees and costs, plus punitive damages..

Result

The parties entered into a settlement whereby Mastercraft would pay $100,000 and C&M would transfer all materials, copyrights, and other works prepared for defendants including any advertisement, computer code, film, photographs, negatives, advertisements, written text, websites, URL's related to the work performed for defendants. Under the terms of the agreement, no party was deemed the prevailing party and no party admitted the truth of the underlying allegations. The court alter awarded $3,075 in attorney fees and $520 in interest, on the delinquent July 18, 2009 payment.

Other Information

The parties also agreed to a general release and that the dismissal of the complaint and counterclaim would both be with prejudice. JUDGES: Arthur Nakazato, James V. Selna.