Tom Hussey Photography LLC v. Family Matters In-Home Care LLC

Background

Tom Hussey Photography LLC and Tom Hussey sued Family Matters In-Home Care LLC for copyright infringement and violation of Hussey’s right of publicity. They alleged that Family Matters’s website displayed copyrighted photographs and a video of Hussey being interviewed about the photographs without permission and to promote Family Matters’s in-home health care services.

Family Matters filed a third-party complaint against James Bowen and Ripen Digital LLC, asserting contribution, indemnity, and declaratory-relief claims. After the court dismissed that complaint with leave to amend, Family Matters filed an amended third-party complaint asserting six causes of action: breach of express contract, breach of implied contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, negligence, and violation of California’s unfair competition law. Family Matters relied in part on written “Optional Service Terms,” including a provision stating that the freelancer would not incorporate or use certain third-party materials in work performed for Family Matters.

The third-party defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not adequately state a legally recognized claim.

Court’s analysis

Rule 14 third-party claims. The court rejected the argument that a third-party complaint may assert only contribution or indemnity claims. The court held that Rule 14 permits other claims when the third party’s potential liability is dependent on the outcome of the main claim and is secondary or derivative. The motion was denied on this ground.

Claims against James Bowen. The amended complaint alleged that Family Matters hired Bowen and Ripen Digital to maintain its website, but it generally attributed the later conduct to Ripen or to the third-party defendants collectively. It did not specifically allege conduct by Bowen. Because Family Matters said it could allege additional supporting facts, the motion to dismiss Bowen as a third-party defendant was granted with leave to amend.

Breach of express contract. The court denied dismissal of this claim. Family Matters identified the alleged contract terms by attaching the Optional Service Terms and pointing to Ripen’s promise not to incorporate third-party copyrighted works into work performed for Family Matters. The court also found that the agreement was not supported solely by an unlawful promise and that the allegations of damages were sufficient at the pleading stage, even though the precise amount had not been stated.

Breach of implied contract. The court granted dismissal with leave to amend. Although Family Matters could plead express and implied contract theories in the alternative, the amended complaint did not actually plead them as alternative theories.

Implied covenant of good faith and fair dealing. The court granted dismissal with leave to amend. It found the claim duplicative of the express-contract claim because Family Matters alleged a breach of an actual contract term rather than conduct that independently frustrated the contract’s benefits. The allegation of bad faith was conclusory and did not show that the alleged misuse of copyrighted works was prompted by bad faith.

Intentional misrepresentation. The court denied dismissal. Rule 9(b) requires fraud allegations to identify the circumstances with particularity, including the who, what, when, where, and how. The court found adequate the allegations that Ripen and/or Bowen promised during contract negotiations not to incorporate third-party copyrighted material, intended not to fulfill that promise when made, and induced Family Matters to enter the agreement.

Negligence. The court granted dismissal with leave to amend. Family Matters alleged a duty to perform the contractual services with reasonable care and without using third-party materials, but it did not plead a duty independent of the contract. Under California law, a contractual breach becomes a tort only when it also violates an independent tort duty.

Unfair competition. The court denied dismissal of the California unfair competition law claim. Because the misrepresentation claim was adequately pleaded, the court rejected the argument that the unfair-competition allegations lacked the required particularity. The court also found that Family Matters adequately alleged economic injury by seeking money allegedly wrongfully retained by the third-party defendants; the court inferred that this referred to the money Family Matters paid Ripen to manage its website.

Disposition

The court granted in part and denied in part the third-party defendants’ motion to dismiss the amended third-party complaint. The motion was granted with leave to amend as to James Bowen, the breach-of-implied-contract claim, the implied-covenant claim, and the negligence claim. It was denied as to the Rule 14 argument, the breach-of-express-contract claim, the intentional-misrepresentation claim, and the unfair-competition claim. Family Matters was ordered to file an amended complaint within 14 days, and the third-party defendants were given 14 days afterward to respond. Judge Yvonne Gonzalez Rogers’s order terminated docket number 52.