Threadgill, et al v. Orleans Parish Sch, et al

Filing 184

ORDER AND REASONS granting Crustos motion 172 to dismiss the City's contributory infringement cross-claim and denying Crusto's motion 172 to dismiss the City's indemnity crossclaim.. Signed by Chief Judge Sarah S. Vance on 7/18/13. (Reference: 12-1460)(jjs, ) (Main Document 184 replaced on 7/18/2013) (jjs, ). Modified on 7/18/2013 (jjs, ). (Image replaced and remailed 7/18/13)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BUTCH THREADGILL, TOM WEEM
AND GENERAL CONTRACTING AND
CONSULTING SERVICES, LLC

CIVIL ACTION

VERSUS

NO: 02-1122

ORLEANS PARISH SCHOOL BOARD,
ET AL.

SECTION: R

ORDER AND REASONS
Before the Court is Mitchell F. Crusto's Rule 12(b)(6)
motion to dismiss the cross-claims of defendant City of New
Orleans ("the City"). For the following reasons, Crusto's motion
is GRANTED IN PART and DENIED IN PART.
I.

BACKGROUND
On January 23, 2000, a severe hail storm caused significant

roof damage to Orleans Parish schools. The City of New Orleans
contracted with Mitchell Crusto d/b/a Angelic Asset Management,
Inc. to adjust the insurance claims for the roof damage with the
City’s insurer, CNA Insurance Company, and to contract on an
emergency basis to repair the damaged roofs.1 Crusto contracted
with Butch Threadgill and Tom Weems through their business,
General Contracting and Consulting Services, LLC, to prepare bids
and estimates for loss and damage to the schools’ roofs.2

1

No. 02-1460, R. Doc. 1.

2

Id. at 3.

In 2002, plaintiffs filed suit against Crusto and the
Orleans Parish School Board.3 They then filed a second suit
against Crusto, the City of New Orleans, and the City’s
insurers.4 The two suits were consolidated.5 Plaintiffs allege
that they submitted repair estimates and bid proposals to Crusto
that were copyrighted to Tom Weems, all rights reserved.6
Plaintiffs also state that they negotiated damage estimates with
CNA Insurance Company.7 Plaintiffs claimed that Crusto did not
pay plaintiffs for the work done, unlawfully displayed the
copyrighted work on his website, and distributed the bids to the
City as his own for approval. Plaintiffs asserted claims under
federal and state copyright law, the Louisiana Unfair Trade
Practices Act, and state tort and contract law.
In 2003, plaintiffs and Crusto entered into arbitration, and
all of the proceedings were stayed. The Court entered a judgment
confirming an arbitration award on June 17, 2009.8 Plaintiffs
then sought to lift the stay to allow the case to proceed among

3

R. Doc. 1.

4

No. 02-1460, R. Doc. 1.

5

R. Doc. 31.

6

No. 02-1460, R. Doc. 1 at 4.

7

Id.

8

R. Doc. 84.
2

the remaining parties, which the Court granted.9 As the parties
prepared for trial, they discovered that the City had never been
notified that the stay had been lifted and trial set. After being
served, the City moved to dismiss plaintiffs’ claims. The Court
granted that motion but gave plaintiffs leave to amend their
complaint.10
On April 3, 2013, Plaintiffs filed a Consolidated Amended
Complaint asserting a claim of unjust enrichment against the City
and the Orleans Parish School Board.11 Two days earlier, the City
had preemptively filed an answer, which included cross-claims
against Crusto for contributory infringement and indemnity.12
Crusto filed a motion to dismiss the cross-claims pursuant to
Rule 12(b)(6).
II.

STANDARD
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff

must plead enough facts to "state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). A claim is facially plausible "when the plaintiff pleads

9

R. Doc. 106.

10

R. Doc. 156.

11

R. Doc. 166.

12

R. Doc. 163.
3

factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. A court must accept all well-pleaded facts as true
and must draw all reasonable inferences in favor of the
plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th
Cir. 2009). But the Court is not bound to accept as true legal
conclusions couched as factual allegations. Iqbal, 556 U.S. at
678.
A legally sufficient complaint need not contain detailed
factual allegations, but it must go beyond labels, legal
conclusions, or formulaic recitations of the elements of a cause
of action. Id. In other words, the face of the complaint must
contain enough factual matter to raise a reasonable expectation
that discovery will reveal evidence of each element of the
plaintiff's claim. Lormand, 565 F.3d at 257.

If there are

insufficient factual allegations to raise a right to relief above
the speculative level, or if it is apparent from the face of the
complaint that there is an insuperable bar to relief, the claim
must be dismissed. Twombly, 550 U.S. at 555.
III. DISCUSSION
A.

Contributory Infringement

The City concedes that, because plaintiffs did not include a
claim for direct copyright infringement in the Consolidated

4

Amended Complaint, the cross-claim for contributory infringement
cannot succeed.13 "A party is liable for contributory
infringement when it, with knowledge of the infringing activity,
induces, causes or materially contributes to the infringing
conduct of another." Alcatel USA, Inc. v. DGI Techs., Inc., 166
F.3d 772, 791 (5th Cir. 1999) (internal quotation marks omitted).
It follows that an allegation of direct infringement is a logical
predicate for a claim of contributory infringement. Accordingly,
the City's cross-claim for contributory infringement must be
dismissed.

B.

Indemnity

The City alleges that, should it be adjudged liable to
plaintiffs for unjust enrichment, Crusto would be obligated to
indemnify the City pursuant to an agreement between the City and
Angelic Asset Management.14 Crusto moves to dismiss this claim as
well, arguing that the indemnity provision at issue does not
cover plaintiffs' claims. This motion is premature.15 “The Fifth

13

See R. Doc. 176 at 3 (characterizing contributory
infringement claim as "moot").
14

R. Doc. 162-1.

15

Contrary to Cristo's assertion, the City's claim for
indemnity is not premature. The City has not requested an
immediate adjudication of Crusto's indemnity obligations; rather,
it has simply alleged that Crusto would be liable to the City in
the event that plaintiffs succeed on their unjust enrichment
claim.
5

Circuit has made clear that 'the duty-to-indemnify issue [is] not
ripe when the underlying . . . lawsuit has not yet been
completed.'” Travelers Cas. & Sur. Co. of Am. v. Univ.
Facilities, Inc., No.

10-1682, 2012 WL 1198611, at *11

(E.D.

La. Apr. 10, 2012) (citing Coregis Ins. Co. v. Sch. Bd. Of Allen
Parish, No. 07-30844, 2008 WL 2325632, at *2 (5th Cir. June 6,
2008)). Because the City's liability to plaintiffs in the
underlying lawsuit, if any, has not yet been determined, the
Court need not decide now whether Crusto would be obligated to
indemnify the City if the City is found liable on plaintiffs’
claims.

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Crusto’s motion

to dismiss the City's contributory infringement cross-claim and
DENIES Crusto's motion to dismiss the City's indemnity crossclaim.

New Orleans, Louisiana, this 18th day of July, 2013.
__

_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

6