Alice McCabe v. Michael Parker

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 09-2555
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Alan R. Thomsen, doing business as *
AJ Sign Company, *
*
Appellant, *
*
v. *
* Appeal from the United States
Famous Dave's of America, Inc., a * District Court for the
Minnesota corporation; Signworks, * District of Minnesota.
doing business as Kurt W. Buggs' *
Signworks; Vomela Speciality *
Company, a Minnesota corporation, *
*
Appellees. *
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Submitted: May 12, 2010
Filed: June 4, 2010
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Before RILEY, Chief Judge, JOHN R. GIBSON, and MURPHY, Circuit Judges.
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MURPHY, Circuit Judge.
Alan R. Thomsen sued Famous Dave's of America, Inc. (Famous Dave's),
and two of its sign vendors, alleging copyright infringement and breach of

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1The Honorable Donovan W. Frank, United States District Judge for the District
of Minnesota.
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contract. The district court 1 granted summary judgment to defendants after
concluding that Thomsen had unambiguously conveyed all contested copyrights to
Famous Dave's by written contract, and Thomsen appeals. We affirm.
I.
Famous Dave's is a chain of barbeque restaurants. In 1995 its co founder
Dave Anderson hired Thomsen, an independent contractor, to design and
manufacture signs and decor for the first Famous Dave's restaurant in the Linden
Hills neighborhood of Minneapolis. In Anderson's words the restaurant was
intended to evoke "the quintessential, all-American barbeque" with a "shack"
theme. The interior decor included hand painted signs depicting fire and stylized
pigs, as well as "memorabilia of by-gone days" such as old license plates.
Thomsen continued to produce artwork and work on interior designs for new
Famous Dave's restaurants throughout the 1990's.
Although he signed his name to several of his earliest drawings and marked
them "not for reproduction[,]" Thomsen did not register copyrights on any work he
created for Famous Dave's in his first six years of working for the company. By
October 2001 Famous Dave's had opened thirty six additional restaurants,
including franchises. Thomsen created and installed his signs at twenty of the
restaurants. In his deposition Thomsen admitted that he had not directly worked on
the other sixteen. He had, however, sold sign packages to Famous Dave's and did
not know where the company chose to place them.
In 2001 Thomsen was working on a new Famous Dave's restaurant in
Wisconsin Dells. Ken Miller, an architect for Famous Dave's, told him that he
intended to integrate design principles from the Wisconsin Dells restaurant into

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2
Anderson signed the agreement on behalf of Famous Dave's, and the agreement
specified that references to "Al" meant "Al and [his wife] Dorothy Thomsen for AJ
Sign Company." Dorothy Thomsen is not a party in this case.
3 We adopt the sequential numbering of paragraphs in the settlement agreement
utilized by the district court. Paragraphs in the original are not numbered.
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another restaurant in development. Thomsen testified that prior to this incident he
had believed that his company, AJ Sign Company, was the only one engaged in
sign work for Famous Dave's. In response to what he perceived as infringement,
Thomsen registered copyrights for several signs he had painted for Famous Dave's.
He retained an attorney and sent Famous Dave's a cease and desist letter.
Thomsen claimed ownership of, among other works, all of the pieces at issue
in the current dispute and proposed that Famous Dave's pay $600,000 to
compensate him for the alleged infringement and to buy a license to the registered
works. Famous Dave's took the position that Thomsen neither created nor owned
the "look, image, and design" of its restaurants but had "merely produced or
painted what was directed of him[.]" Thomsen's invoices for designs had not
included any copyright notice or other claim of ownership.
Thomsen and Dave Anderson ultimately resolved the dispute by negotiating
a settlement agreement without the assistance of attorneys. They 2 signed the
agreement on October 4, 2001. It provided, in part:
[paragraph six]3
[Famous Dave's] agrees to respect Al's creative architectural/decor
designs for Sioux Falls, Burnsville, Crosslake, and Wisconsin Dells.
The company further agrees to identify these particular restaurants as
"signature restaurant designs" created by Al's company and will use
best efforts to advise all future franchise operators and their architects
of the proprietary and copyright nature of these architectural/decor
concepts as solely provided by Al.

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This includes all future stores that Al designs, develops, or decors.
[paragraph nine]
. . . In return, Al is releasing all copyright, proprietary design and sign
work to [Famous Dave's] in all other restaurants that he has worked
on with the exception of Sioux Falls, Burnsville, Crosslake, and
Wisconsin Dells. This does not preclude Al from producing or
manufacturing these signs for Famous Dave's. (Emphasis supplied.)
The agreement also included recognition by Famous Dave's that Thomsen "was
squeezed out of design fees of two recently completed restaurants."
Famous Dave's agreed to pay Thomsen $15,000 in compensation as well as
his attorney fees, estimated between $5,000 and $8,000. After signing the
agreement Thomsen continued to perform interior design work for Famous Dave's
restaurants, some of which he designated on his invoices as "signature" restaurants.
In 2007 Thomsen brought this suit against Famous Dave's and two of its
sign vendors, alleging various copyright infringement claims in violation of the
Copyright Act of 1976, 17 U.S.C. § 101 et seq., for twenty works he had created
between 1995 and 2000. Thomsen also alleged that Famous Dave's breached the
settlement agreement, and he sought a declaration that the agreement was
ineffective. Famous Dave's counterclaimed for breach of contract and for a
declaratory judgment that it is the sole and proper owner of the copyrights over
which Thomsen asserted ownership. In addition the company requested
reimbursement for the cost of recording the transfer of the copyright registrations
of the disputed works to Famous Dave's. All three appellees moved for attorney
fees and costs under 17 U.S.C. § 505 and 28 U.S.C. § 1927. The district court
granted summary judgment to them on all copyright and contract claims but denied
their request for attorney fees. Thomsen appeals.

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II.
We review a summary judgment de novo. Swift & Co. v. Elias Farms, Inc.,
539 F.3d 849, 851 (8th Cir. 2008). The parties agree that the settlement agreement
is governed by Minnesota law. There is accordingly an initial question of whether
the contract is ambiguous. Id. This issue is a question of law. Denelsbeck v.
Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003). Thomsen urges us to
"plac[e] [our]selves in the position of the parties at the time the agreement was
negotiated" and take into account the surrounding circumstances in deciding
whether he conveyed any copyrights to Famous Dave's. Midway Ctr. Assocs. v.
Midway Ctr., Inc., 237 N.W. 2d 76, 78 (Minn. 1975). Under Minnesota law,
however, we may consider parol evidence "only if the contract is ambiguous on its
face." Hous. and Redev. Auth. of Chisholm v. Norman, 696 N.W.2d 329, 337
(Minn. 2005). "A contract is ambiguous if, based upon its language alone, it is
reasonably susceptible of more than one interpretation." Art Goebel, Inc. v. N.
Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn. 1997).
The settlement agreement signed by Anderson and Thomsen unambiguously
assigned ownership of certain copyrights to Famous Dave's. Paragraph nine of the
agreement plainly states that "Al is releasing all copyright, proprietary design and
sign work to [Famous Dave's] in all other restaurants that he has worked on with
the exception of [signature restaurants.]" A transfer of ownership requires no
"magic words" to satisfy copyright law; even "a one-line pro forma statement will
do." Radio Television Espanola S.A. v. New World Entm't, Ltd., 183 F.3d 922,
927 (9th Cir. 1999) (quotation omitted). Paragraph nine is a clear conveyance
("releasing . . . to") of the sum total of Thomsen's previous work for Famous
Dave's ("all other restaurants that he has worked on") with the explicit exception of
his signature restaurant designs and future designs. For ease of reference we will
call the transferred works "existing non signature designs."

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Our interpretation of paragraph nine relies as it must on the "plain and
ordinary meaning" of the text. Bank Midwest, Minn., Iowa, N.A. v. Lipetzky, 674
N.W.2d 176, 179 (Minn. 2004). It is also consistent with paragraph six because
paragraph nine preserves for Thomsen precisely the categories of work which are
the subject of paragraph six – future works and signature restaurant designs.
Moreover, the last sentence in paragraph nine is logical only if that paragraph
conveys ownership. Thomsen would not need to reserve the right to continue
making the signs if he had not conveyed the copyrights to them. Our task is to
"construe a contract as a whole and attempt to harmonize all clauses[.]" Chergosky
v. Crosstown Bell, Inc., 463 N.W.2d 522, 525 (Minn. 1990).
Thomsen attempts to obscure the clarity of paragraph nine by arguing that
the statement "Al is releasing all copyright, proprietary design and sign work to
[Famous Dave's]" means that Thomsen is releasing Famous Dave's from liability
for copyright infringement. He argues that the dictionary supports his
interpretation. In Black's Law Dictionary 1292 (7th ed. 1999), the first definition
of "release" is "liberation from an obligation, duty, or demand; the act of giving up
a right or claim to the person against whom it could have been enforced[.]"
According to Thomsen, paragraph nine can reasonably be interpreted to
mean he was "liberating" Famous Dave's from liability. The first sentence of
paragraph nine does not speak about liability, however. It uses the phrase
"releasing . . . to," not "releasing . . . from." This language leaves paragraph nine
susceptible to only one interpretation, and that is that Thomsen was giving up a
right or claim to Famous Dave's, rather than liberating Famous Dave's from an
obligation. "Because a word has more than one meaning does not mean it is
ambiguous[;] . . . only if more than one meaning applies within that context does
ambiguity arise." Bd. of Regents of Univ. of Minn. v. Royal Ins. Co. of Am., 517
N.W.2d 888, 892 (Minn. 1994). Thomsen's strained reading of the first sentence of
paragraph nine would make little sense for it would be saying that he "is liberating

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from an obligation all copyright, proprietary design and sign work to Famous
Dave's."
Even though the agreement was written without the assistance of counsel,
the parties knew how to employ words reflecting a release from liability when they
so intended. As paragraph sixteen states, "Al agrees that the company will be
forgiven . . . and that Al will not sue the company for any past infringements or
disagreements." This provision thus expresses a waiver of liability for past
copyright infringement.
Thomsen claims that paragraph sixteen is only a partial release applicable to
copyright infringement of his signature restaurant designs while paragraph nine
releases Famous Dave's from liability for infringement of his existing non
signature restaurant designs. That is not what paragraph sixteen says, however, for
it refers without limitation to "any past infringements[.]" (Emphasis supplied.)
This universal release would make the partial release Thomsen wants to have read
into paragraph nine superfluous. Under Minnesota law we must "attempt to avoid
an interpretation of the contract that would render a provision meaningless."
Chergosky, 463 N.W.2d at 526.
Thomsen argues that our interpretation of paragraph nine is incompatible
with "the main purpose" of the agreement. The first paragraph states that "Dave
[Anderson] and Martin [O'Dowd, then the Chief Executive Officer of Famous
Dave's]'s goal is to create again a spirit of cooperation between Al and the
company." The agreement also references the parties' intent to avoid "surprises"
and to "start[] over with a clean slate[.]" These broad principles are not
undermined by Thomsen's conveyance of copyrights in existing non signature
restaurant designs to Famous Dave's. To the contrary, the parties' division of
ownership of disputed designs would seem to facilitate future cooperation.
Moreover, the "specific terms of a contract govern over the general in the event of
conflict." Medtronic, Inc. v. ConvaCare, Inc., 17 F.3d 252, 255 (8th Cir. 1994)

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(applying Minnesota law). Thomsen's interpretation would subjugate the plain and
specific language of paragraphs six and nine to what he acknowledges are only the
parties' general purposes to reach an agreement.
We also see no conflict between Thomsen's transfer of copyrights to his
existing non signature restaurant designs and paragraphs two through five. These
paragraphs elaborate on the ways in which Famous Dave's will respect the
"proprietary nature of [Thomsen's] work[.]" In paragraph three, for example,
Famous Dave's promises to "use best efforts to explain to all existing franchise
owners and future franchise owners the proprietary nature of Al's design work and
that they are not to be copied or duplicated." The company agrees in paragraph
four to "guarantee that there are no present attempts to duplicate Al's designs[.]" In
paragraph five, Famous Dave's agrees to "clearly mark . . . as Al's work"
reproductions of it in company publications.
Thomsen correctly observes that these initial paragraphs refer to "Al's
work[,]" "Al's design work[,]" and "Al's designs" without qualification.
Nevertheless, Thomsen's "work" is logically limited to what he actually owns
under the agreement, which is specifically defined in paragraphs six and nine as his
signature restaurant designs and future designs. Paragraphs six and nine are thus
harmonious with paragraphs two through five. That references to Thomsen's
"designs" and "work" occur before the agreement narrows his copyright interests
makes no difference. Thomsen references no authority to support his argument
that initial provisions in a contract cannot be clarified or amplified in subsequent
sections.
Instead, he cites Advantage Consulting Group, Ltd. v. ADT Sec. Sys., Inc.,
306 F.3d 582, 586 (8th Cir. 2002), where we explained that a term's location in a
contract may show the parties' intent but that it is "certainly not dispositive[.]"
Only by reading references to Thomsen's "work" in paragraphs two through five as
incorporating the more specific ownership provisions in paragraphs six and nine

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can we give effect to "[e]ach and every provision" of the agreement and
"harmonize [them] with one another" as Minnesota law guides. Oster v.
Medtronic, Inc., 428 N.W.2d 116, 119 (Minn. Ct. App. 1988). If paragraphs two
through five reserved all of Thomsen's copyrights without limitation as he claims,
paragraph six would be unnecessary and paragraphs nine and sixteen would not
mean what they say.
Thomsen claims that because he received no money for the copyright
transfer, Famous Dave's interpretation of the agreement would lead to an absurd
result. He did, however, receive up to $23,000 in the parties' settlement. The
agreement states that this payment was for lost design fees and attorney fees, but
Thomsen obtained several other benefits from Famous Dave's as well. For
example, the company agreed to recognize and "respect" his "creative
architectural/decor designs" of the four signature restaurants, to recommend his
"turn-key" service to all future franchise operators, to "provide Al the opportunity
for additional sign work[,]" and "not to pursue any legal avenues of retribution
against Al as a result of this potential lawsuit." Thomsen in turn agreed to
"release[] all copyright, proprietary design and sign work to [Famous Dave's] in all
other restaurants that he has worked on" other than the signature restaurant designs
and future designs, and "not [to] sue the company for any past infringements or
disagreements."
This agreement was an exchange of mutual promises and concessions that
mended the parties' business relationship. Whether Thomsen made a wise bargain
is irrelevant, as unambiguous contract language "shall be enforced by courts even
if the result is harsh." Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 347
(Minn. 2003) (quotation omitted). Minnesota law "follows the long-standing
contract principle that a court will not examine the adequacy of consideration as
long as something of value has passed between the parties." C & D Invs. v.
Beaudoin, 364 N.W.2d 850, 853 (Minn. Ct. App. 1985); see also Kielley v.
Kielley, 674 N.W.2d 770, 777-78 (Minn. Ct. App. 2004) ("Where promises are

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mutual, made concurrently, and incorporated into a bilateral contract, such
promises are sufficient consideration for each other.").
We conclude that Thomsen unambiguously transferred ownership of all
existing non signature restaurant designs to the company. Nonetheless, the
agreement does not explicitly state that the twenty copyrights disputed in this case
are not signature restaurant designs preserved for Thomsen. Where contract terms
are ambiguous, "construction becomes a question of fact unless extrinsic evidence
is conclusive." Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 751
(Minn. 2000) (emphasis supplied); see also Cherne Contracting Corp. v. Marathon
Petroleum Co., LLC, 578 F.3d 735, 740 (8th Cir. 2009) ("[A]mbiguities in written
contracts" do not "necessarily preclude summary judgment. Rather, . . . where no
reasonable jury could find the facts necessary to entitle a plaintiff to relief,
summary judgment remains appropriate. ").
According to Thomsen "almost all" of the disputed copyrights were placed
into "one or more" of the four signature restaurants that are excluded from
Thomsen's copyright transfer in paragraph nine of the agreement. In his
deposition, however, Thomsen made clear that he understood "signature restaurant
designs" to refer to those design elements unique to the signature restaurants. As
Thomsen explained, signature restaurant designs meant "[a]ny elements" that were
"new . . . to that particular restaurant." He argues that the district court construed
the term too narrowly, but he has not cited evidence suggesting that the parties
intended it to include any of the disputed copyrights.
At the summary judgment stage, Thomsen is entitled only "to those
inferences which might be made without resorting to speculation." Border State
Bank, N.A. v. AgCountry Farm Credit Servs., 535 F.3d 779, 783 (8th Cir. 2008).
After a careful review of the record, we conclude that no reasonable factfinder
could determine that the signature restaurant designs over which Thomsen retained
ownership encompassed work not unique to the signature restaurants such as the

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twenty disputed copyrights. Thomsen's copyright claims therefore fail as a matter
of law.
We now turn to the disposition of the contract claims. Thomsen alleged that
Famous Dave's breached the settlement agreement. The company counterclaimed
for breach of contract, seeking a declaratory judgment that it was the sole owner of
the disputed copyrights and reimbursement for the cost of recording the transfer of
the copyrights. The district court granted summary judgment to Famous Dave's on
all contract claims. On appeal Thomsen makes no argument unique to the contract
issues; he relies on his position that there was no transfer of copyrights in the
agreement. These claims also fail for the reasons already discussed.
III.
Accordingly, we affirm the judgment of the district court.
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