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Bell v. KG American Real Estate Holdings, LLC

United States District Court, S.D. Indiana, Indianapolis Division

September 16, 2016

RICHARD N. BELL, Plaintiff,
v.
KG AMERICAN REAL ESTATE HOLDINGS, LLC Defaulted 2/4/2016, Defendant.

          RICHARD N. BELL, Plaintiff, represented by Richard N. Bell, BELL LAW FIRM.

          KG AMERICAN REAL ESTATE HOLDINGS, LLC, Defendant, Pro Se.

          ORDER

          JANE MAGNUS-STINSON, District Judge.

         Presently pending before the Court is Plaintiff Richard N. Bell's Objection, [Filing No. 18], to the Magistrate Judge's Report and Recommendation, [Filing No. 17], on Mr. Bell's Motion for Default Judgment against Defendant KG American Real Estate Holdings, LLC ("KG Real Estate"), [Filing No. 11].[1] For the reasons set forth herein, the Court overrules Mr. Bell's Objection, [Filing No. 18], and adopts the Magistrate Judge's Report and Recommendation in full, [Filing No. 17].

         I. STANDARD OF REVIEW

         A district judge may designate a magistrate judge "to conduct hearings, including evidentiary hearings, and to submit... proposed findings of fact and recommendations for the disposition." 28 U.S.C. § 636(b)(1)(B); see also Fed. R. Civ. Pro 72(b)(1). Any party may file an objection to a magistrate judge's recommended disposition within 14 days. 28 U.S.C. § 636(b)(1); see also Fed. R. Civ. Pro. 72(b)(2).

         Orders granting default judgment are dispositive. See, e.g., United States ex rel. Abner v. Jewish Hosp. Health Care Servs., Inc., 2010 WL 723409, *2 (S.D. Ind. 2010) (reviewing de novo a magistrate judge's recommendation regarding a motion for default judgment, since it "constitutes a dispositive matter"). If a timely objection is made, the Court must conduct a de novo review and "may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Fed. R. Civ. Pro. 72(b)(3). While the Court is required to make "a de novo determination... a de novo hearing is not required." Pinkston v. Madry, 440 F.3d 879, 893 (7th Cir. 2006) (citing United Stated v. Raddatz, 447 U.S. 667, 674 (1980)); see also Goffman v. Gross, 59 F.3d 668, 671 (7th Cir. 1995) ("But this de novo determination is not the same as a de novo hearing. The district court is not required to conduct another hearing to review the magistrate judge's findings or credibility determinations."). Instead, if the Court is satisfied with the magistrate judge's findings and recommendations, even with regard to credibility determinations, "it may in its discretion treat those findings and recommendations as its own." Goffman, 59 F.3d at 671; see also 28 U.S.C. § 636(b)(1) (the Court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge").

         II. BACKGROUND

         On September 9, 2015, Mr. Bell filed a Complaint against KG Real Estate in this Court, alleging claims for copyright infringement and unfair competition with regard to a photograph he took of the downtown Indianapolis skyline (the "Photo"). [Filing No. 1.] KG Real Estate never answered Mr. Bell's Complaint or otherwise defended itself in this litigation, and Clerk's Entry of Default was entered against it on February 4, 2016. [Filing No. 10.]

         On April 11, 2016, Mr. Bell filed a Motion for Default Judgment, requesting "at least $150, 000 in statutory damages plus $1, 417.50 in attorney's fees and costs" in his favor. [Filing No. 11; Filing No. 12 at 1.] Mr. Bell also asked for declaratory and injunctive relief against KG Real Estate. [Filing No. 11 at 2.] The Court referred that motion to the assigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B). [Filing No. 13.]

         The Magistrate Judge held an evidentiary hearing on Mr. Bell's Motion for Default Judgment on June 29, 2016. [Filing No. 16.] Mr. Bell appeared in person, presented evidence, and made arguments. [Filing No. 16.] KG Real Estate failed to appear, despite Mr. Bell serving it with notice of the hearing as ordered by the Magistrate Judge. [Filing No. 14; Filing No. 15; Filing No. 16.] At the hearing, Mr. Bell withdrew his request for an injunction because KG Real Estate had removed the Photo from its website, and he also withdrew his request for attorney's fees because he is representing himself. [Filing No. 17 at 3.] Mr. Bell maintained his request for declaratory relief, seeking a declaration that he is the lawful owner of the copyright of the Photo and that KG Real Estate has no rights to the Photo. [Filing No. 17 at 3.] The Magistrate Judge took the matter under advisement. [Filing No. 16.]

         On July 22, 2016, the Magistrate Judge issued her Report and Recommendation. [Filing No. 17.] She found that KG Real Estate's liability for violating federal copyright law was established by the entry of default based on the factual allegations in Mr. Bell's Complaint.[2] [Filing No. 17 at 1-3.] Specifically, Mr. Bell is the owner of the copyright of the Photo and it was registered with the United States Copyright Office in August 2011. [Filing No. 17 at 2.] Sometime in 2015, KG Real Estate began using the Photo on its business website to market its real estate services in Indianapolis. [Filing No. 17 at 2.] Mr. Bell never authorized KG Real Estate to use the Photo and KG Real Estate never paid a licensing fee to use the Photo. [Filing No. 17 at 2.]

         The Magistrate Judge recommended that the Court decline to exercise its power under the Declaratory Judgment Act to issue declaratory relief because KG Real Estate has never claimed any rights to the photo and, by defaulting, has admitted Mr. Bell's allegations regarding his ownership. [Filing No. 17 at 3-4 (citing Bell v. Taylor, 827 F.3d 699 (7th Cir. 2016)).] As for the amount of statutory damages to which Mr. Bell is entitled, the Magistrate Judge found that his "request for the maximum award [of $150, 000] is not justified by the evidence he offered-not even close." [Filing No. 17 at 4.] The Magistrate Judge found that Mr. Bell's Complaint "minimally alleges sufficient facts to fall within the definition of willfulness, but Mr. Bell did not offer additional evidence at the hearing to suggest KG Real Estate's actions were particularly egregious." [Filing No. 17 at 5.] To support that conclusion, the Magistrate Judge found as follows:

Mr. Bell stated he had had several conversations with KG Real Estate and KG Real Estate removed the Photo from its website, but the parties were not able to agree on a resolution of the lawsuit. Mr. Bell stated KG Real Estate had said things that led Mr. Bell to believe KG Real Estate knew it should not have used the Photo on its website, but Mr. Bell did not describe what KG Real Estate had said. Instead, Mr. Bell asserted generally that everyone should know that unless he specifically has paid for a license or obtained permission from an owner, no photograph can be used on a website without that use constituting willful copyright infringement. The court is not willing to accept such a generalized view of willfulness that is not based on the specific circumstances surrounding a particular infringement. For example, there is no evidence here whether KG Real Estate even created the website or played any role in selecting the Photo for use on its website; it may have hired others to build the website and populate its content. There is no evidence about how long the Photo appeared on the ...

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