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Driscoll v. Singing Tree Farms, Inc.

United States District Court, D. Montana, Butte Division

February 11, 2015

PHYLLIS DRISCOLL and 3-D, INC., Plaintiffs,
v.
SINGING TREE FARMS, INC., BIG SKY CARVERS, LLP, BIG SKY CARVERS, INC., KRISTAN E. BASTA, MARC PIERCE, ELEVATION, LLC, f/k/a THE YELLOWSTONE COMPANY, LLC, BIG SKY CARVERS, LLC, a/k/a BIG SKY CARVERS LIQUIDATION COMPANY, LLC, MONTANA SILVERSMITHS, INC., GROUP MONTANA, INC., MTS GROUP, INC., DD TRADERS, INC. d/b/a DEMDACO, and JANE AND JOHN DOES I-V, Defendants.

ORDER

DANA L. CHRISTENSEN, Chief District Judge.

Before the Court are Defendants' motion for summary judgment on statute of limitations and Defendants' motion to dismiss. The Court grants the motions in part and denies them in part. Except for Plaintiffs' claim for bailment, all claims are barred by the applicable statute of limitations. The claim for bailment fails to state a claim. Accordingly, all of Plaintiffs' claims are dismissed.

Factual Background

The material facts in this case are straightforward and are not in dispute.[1] Plaintiff Phyllis Driscoll is a sculptor and an independent contractor, and the President of Plaintiff 3-D, Inc. Plaintiffs ("Driscoll") bring this diversity action against Defendants, which are corporate entities engaged in the business of marketing, selling, reproducing, and/or distributing sculptures.

Beginning in 1996, Driscoll, as an independent contractor, began sculpting figurines for Defendant Singing Tree Farms, Inc. ("Singing Tree"), a company owned and run by Kris and Ray Basta. Effective January 1, 2000, Singing Tree and a company called Big Sky Carvers, LLP, merged and formed Big Sky Carvers, Inc. ("BSCI"). Singing Tree and Big Sky Carvers, LLP ceased to exist upon the merger.

In early 2000, Kris Basta ("Basta"), on behalf of BSCI, approached Driscoll about a new project that BSCI had with another corporate entity, Defendant Montana Silversmiths, Inc. ("MSS"), to create new products. To effectuate this project, Basta asked and Driscoll agreed to create a horse sculpture for BSCI for a flat fee.

During these initial discussions, Basta told Driscoll that MSS did not pay a royalty. Basta said to Driscoll, "Montana Silversmiths will never pay a royalty on the horse sculptures." (Doc. 64 at 41.) Basta then added, "Don't even ask because they will never pay a royalty." Id. Driscoll was accustomed to a royalty arrangement, and told Basta that she would prefer to earn a royalty rather than a flat fee. Driscoll asked Basta why MSS would not pay a royalty. Basta replied, "That's just the kind of company Montana Silversmiths is." Id. at 42.

Sometime around April 21, 2000, Driscoll asked Basta again if she could earn a royalty for the horse sculpt instead of a flat fee. Basta responded, "No, this company will never pay a royalty, they just won't, it's Montana Silversmiths, they just will not pay a royalty." Id.

On later occasions, between the years 2000 and 2002, Basta and other BSCI representatives repeated the statement to Driscoll that, "MSS does not pay royalties, " and made similar statements. Id. In addition, between the years 2000 and 2004, BSCI representatives made similar statements regarding royalties to Driscoll's husband, Marc Driscoll.

Basta did not inform Driscoll that BSCI had entered into a royalty agreement with MSS, effective January 1, 2000, in which BSCI agreed to provide certain services to MSS to develop a cowboy giftware line of products in exchange for an 8.5% royalty on the sale of each product developed, created, or designed by BSCI. This agreement resulted in BSCI earning an 8.5% royalty on the sale of each of Driscoll's horse sculpts. Driscoll understood that BSCI was providing consulting services to MSS.

Each time Driscoll presented a horse sculpture to BSCI, she was paid a flat fee and entered into a written agreement entitled, "Perpetual Grant of Reproduction Rights" ("PGRR"). Driscoll understood that the rights she transferred to BSCI would then be assigned by BSCI to MSS. This assignment from BSCI to MSS was reflected in the bottom portion of each PGRR. Each PGRR that Driscoll signed provided, "Artists has been compensated in full for the Artist's involvement in the Master and such Master shall not be, now or ever, subject to any royalty payments." (Doc. 33-4 at 3.)

In mid-May 2011, Driscoll learned that MSS paid royalties to artists. On April 30, 2013, Driscoll initiated this action against Defendants for fraud, constructive fraud, deceit, breach of the implied covenant of good faith and fair dealing, unjust enrichment, breach of contract/license, voidable title, bailment, copyright infringement, Lanham Act claims, and declaratory judgment.

Legal Standard

A party is entitled to summary judgment if it can demonstrate 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). Summary judgment is warranted where the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). A party opposing a properly supported motion for summary judgment "may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. at 256. Only disputes over facts that might affect the outcome of the lawsuit will preclude entry of summary judgment; factual disputes that are irrelevant or unnecessary to the outcome are not considered. Id. at 248. In ruling on a motion for summary judgment, "[t]he evidence of the non-movant is to be believed, and all ...


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