Case 1:23-cv-01058-MPB-KMB Document 12 Filed 07/12/23 Page 1 of 9 PageID #: 647

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

DCG INDIANA, INC. d/b/a DILLON )

CONSTRUCTION GROUP a/k/a DILLON )
CONSTRUCTION a/k/a DCG )
CONSTRUCTION, )
)
Plaintiff, )
) CASE NO. 1:23-cv-1058-MPB-KMB
vs. )
) JURY DEMANDED
CARDINAL XLIII, LLC, MOTORSPORT )
REAL ESTATE VENTURES, LLC d/b/a )
ANDRETTI MOTORSPORTS, STUDIO )
M ARCHITECTURE AND PLANNING, )
LLC, GRADEX, INC., and GLENMARK )
CONSTRUCTION COMPANY, INC., )
)
Defendants. )

COMBINED MOTION TO AMEND COMPLAINT TO DISMISS COUNT 3 WITH

PREJUDICE AND TO REMAND TO STATE COURT

Plaintiff, DCG Indiana, Inc. d/b/a Dillon Construction Group a/k/a Dillon Construction

a/k/a DCG Construction (“DCG”), by counsel, respectfully requests leave to amend its

Complaint to dismiss Count 3 with prejudice and moves to remand this action to the Hamilton

County courts. In support of this Motion, DCG states as follows:

INTRODUCTION

This action arises from the design and construction of a motor racing facility for Andretti

Motorsports in Fishers, Indiana (the “Project”). On November 4, 2022, Defendant Cardinal

XLIII, LLC (“Cardinal”) and DCG entered into an AIA A141-2014 Standard Form of Agreement

between Owner and Design-Builder (the “Design-Build Contract”), pursuant to which DCG was

to serve as the design-builder for the Project. Unlike a design-bid-build project delivery method,
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under which a project owner first retains a design professional who develops a relatively

complete design for a project that is only then released for bidding, a design-builder is

responsible for both the design and construction of a project.

After DCG had begun design and limited construction, and effective as ofApril 7, 2023,

Cardinal terminated the Design-Build Contract. On May 22, 2023, DCG filed its state-court

action, which consisted of four counts:

Count 1: Breach of Contract against Cardinal

Count 2: Fraudulent Transfer against Cardinal and Defendant Motorsport Real Estate
Ventures, LLC d/b/a Andretti Motorsports

Count 3: Copyright Infringement against Cardinal

Count 4: Lien Foreclosure against Motorsport and various defendants who also recorded
mechanic’s liens

(Docket No. 1-2 at 13-20).

On June 19, 2023, Cardinal filed its Notice of Removal. (Docket No. 1). Cardinal claims

that removal is appropriate because Count 3, copyright infringement, raises a federal question.

(Docket No. 1 at 2-3).

However, Count 3 depends entirely on the determination whether DCG or Cardinal owns

the design plans after Cardinal’s termination of the Design-Build Contract. That determination

turns exclusively on whether Cardinal’s termination was wrongful pursuant to the Design-Build

Contract. Thus, Count 3 is entirely derivative of DCG’s breach of contract claim in Count 1, and

the Seventh Circuit has held that an entirely derivative action does not support removal.

More importantly, for a variety of reasons, DCG has decided to relinquish its copyright

claim and to dismiss Count 3 with prejudice. Thus, in the absence of a federal question (and

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without complete diversity of citizenship), the Court should remand this action to the Hamilton

County courts.

MOTION FOR LEAVE TO AMEND COMPLAINT

TO DISMISS COUNT 3 WITH PREJUDICE

For the following reasons, DCG seeks leave to amend its Complaint to dismiss Count 3

with prejudice:

1. On May 22, 2023, DCG filed this action, which included Count 3 – Copyright

Infringement against Cardinal.

2. After further investigation and discussions with its designers, DCG has

determined that the Count 3 copyright claim will distract from the dispositive issue: whether

Cardinal wrongly terminated the Design-Build Contract.

3. DCG therefore wishes to dismiss Count 3 with prejudice.

4. Voluntary dismissal of a count, rather than an entire action, must be made by a

motion to amend the complaint. Taylor v. Brown, 787 F.3d 851 (7th Cir. 2015).

5. A party may amend its pleading with the court’s leave. Fed. R. Civ. P. 15.

6. The court should freely give leave when justice so requires. Id.

7. “In the absence of any apparent or declared reason—such as undue delay, bad

faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by

amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of

the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be

‘freely given.’” Barry Aviation Inc. v. Land O’Lakes Municipal Airport Com’n (377 F.3d 682

(7th Cir. 2004)) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)); see also Moran v. Calumet

City, 54 F.4th 483 (7th Cir. 2022) (“District courts ‘should freely give leave when justice so

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requires,’ that is, unless there is a good reason not to, such as ‘futility, undue delay, prejudice, or

bad faith.’” (quoting Law Offs. Of David Freydin, P.C. v. Chamara, 24 F.4th 1122, 1133 (7th

Cir. 2022))). Mere delay, without a showing of prejudice, is not sufficient to deny the

amendment. Doherty v. Davy Songer, Inc., 195 F.3d 919, 922 (7th Cir. 1999).

8. This Motion is made in good faith and without intent to delay the proceedings.

Indeed, dismissing Count 3 benefits both parties and this Court by eliminating a count and

streamlining this action. It is a further benefit to Cardinal, allowing it to proceed with

construction of the Project without concern about Project design plan ownership.

9. A copy of the proposed Second Amended Complaint is included herewith as

Exhibit 1.

WHEREFORE, DCG, by counsel, respectfully prays for an order granting it leave to

amend its Complaint to dismiss Count 3 with prejudice, and for all other just and proper relief.

MOTION TO REMAND

For the following reasons, DCG moves to remand this action to the Hamilton County

courts:

1. As there is not complete diversity of citizenship, Cardinal’s sole basis for removal

of this action from the Hamilton County Circuit Court rests upon a federal question purportedly

raised by Count 3 of DCG’s Complaint. (See Docket No. 1-2 at 13-20).

2. DCG’s dismissal of Count 3 by amendment removes any purported federal

question and thus eliminates federal question jurisdiction.

3. “If at any time before final judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded.” 28 U.S.C.A. § 1447 (emphasis added).

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4. Without the copyright claim, there is no longer a purported federal question at

issue, and the matter should be heard in state court.

5. However, even if Count 3 were to remain, remand would still be proper. Count 3

states:

116. The Design-Build Contract granted to Cardinal a limited, irrevocable, and

nonexclusive license to use the tangible and intangible creative work developed by DCG
(“Instruments of Service”).

117. However, the Design-Build Contract also deems DCG as the author and owner of
the Instruments of Service and indicates that DCG retains all common law, statutory and
other reserved rights, including copyrights.

118. Moreover, the Design-Build Contract specifies that the license granted by DCG to
Cardinal terminates if Cardinal does not substantially perform its obligations, including
prompt payment of all sums when due.

119. Cardinal wrongfully terminated the Design-Build Contract and failed to pay DCG
all sums when due, and the license for it to use DCG’s Instruments of Service has
terminated.

120. Despite being warned by DCG counsel, Cardinal has continued to use DCG’s
Instruments of Service.

(Docket No. 1-2 at 19-20) (emphasis added).

6. Regarding ownership of the Instruments of Service, the Design-Build Contract

states:

§ 1.4.5 Instruments of Service. Instruments of Service are representations, in any medium

of expression now known or later developed, of the tangible and intangible creative work
performed by the Design-Builder, Contractor(s), Architect, and Consultant(s) under their
respective agreements. Instruments of Service may include, without limitation, studies,
surveys, models, sketches, drawings, specifications, digital models and other similar
materials.

§ 12.1 Drawings, specifications, and other documents furnished by the Design-Builder,

including those in electronic form, are Instruments of Service. The Design-Builder, and
the Architect, Consultants, Contractors, and any other person or entity providing services
or work for any of them, shall be deemed the authors and owners of their respective
Instruments of Service, including the Drawings and Specifications, and shall retain all
common law, statutory and other reserved rights, including copyrights. . . .

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....

§ 12.3 Upon execution of the Agreement, the Design-Builder grants to the Owner a
limited, irrevocable and nonexclusive license to use the Instruments of Service solely and
exclusively for purposes of constructing, using, maintaining, altering and adding to the
Project, provided that the Owner substantially performs its obligations, including prompt
payment of all sums when due, under the Design-Build Documents. The license granted
under this section permits the Owner to authorize its consultants and separate contractors
to reproduce applicable portions of the Instruments of Service solely and exclusively for
use in performing services or construction for the Project. If the Design-Builder rightfully
terminates this Agreement for cause as provided in Section 13. l .4 or 13 .2.1 the license
granted in this Section 12.3 shall terminate.

(Emphasis added).

7. “A suit comes under federal jurisdiction under Section 1331 when a substantial

claim is founded directly on federal law.” International Armor & Limousine Co. v. Moloney

Coachbuilders, Inc., 272 F.3d 912 (7th Cir. 2001) (emphasis added).

8. The Court’s ruling in International Armor is dispositive. In that case, Moloney

sold his limousine assets, including the name “Moloney Coach Builders,” to Jacques Moore, who

incorporated Moloney Coachbuilders, Inc. Id. at 913. After Moloney’s no-competition clause

expired, he reentered the armored stretch limousine business as International Armor &

Limousine Company but advertised the company with such phrases as, “The world’s standard in

extended limousines was created by E.F. Moloney, the pioneer in the stretch limousine industry,”

and “A Moloney Owned Entity.” When Moloney Coachbuilders protested Moloney’s use of the

Moloney name, International Armor sought declaratory judgment in Federal court that its use of

these and similar phrases did not violate the Lanham Act. Id.

9. On appeal, the Seventh Circuit Court of Appeals sua sponte raised and addressed

the issue of subject matter jurisdiction:

The problem is simple: This is a contract dispute, and although the stakes may exceed
$75,000 all litigants are citizens of Illinois. The contracts of 1986 and 1990 are about

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trademarks, so a claim under the Lanham Act may be derivative of the rights conferred.
Whichever side owns the marks may use them, and whichever side does not own them is
at risk under the Lanham Act as well as the law of contract. Many federal statutes create
property rights that may become the subject of ownership disputes: copyright law, patent
law, trademark law, and a score of licensing systems. Any fight about ownership could be
recharacterized as a claim for redress under federal law. . . . If the outcome of a suit
nominally under federal law depends entirely on the state law of contracts, does the
dispute come within the federal-question jurisdiction of 28 U.S.C. § 1331, which applies
to “all civil actions arising under the Constitution, laws, or treaties of the United States”?

Id. at 914.

10. The Court concluded:

Long before the Supreme Court adopted the artful-pleading doctrine and permitted
district courts to look behind the surface of a complaint, Judge Friendly concluded in T.B.
Harms Co. v. Eliscu, that a dispute about the ownership of a copyright does not arise
under federal law, even though the dispute could not exist but for the property right
created by copyright, a federal ingredient that would have been enough under Osborn’s
expansive understanding. That conclusion holds sway among the federal appellate courts,
and we have not only adopted it for copyright disputes but also extended it to disputes
about ownership of patents.

Id. at 915–16 (internal citations omitted) (emphasis added).

11. International Armor, therefore, indicates that a copyright (or trademark or patent)

issue does not automatically raise a federal question. To create federal question jurisdiction, an

action must raise a “substantial claim founded directly on federal law”; disputes solely

concerning the ownership of a copyright do not rise to that level.

12. In its Notice of Removal, Cardinal cites to Nova Design Build, Inc. v. Grace

Hotels, LLC, 662 F.3d 814 (7th Cir. 2011), for the suggestion that copyright infringement

allegations are sufficient to create federal question jurisdiction. However, in Nova, the Court had

to conduct an analysis of: (1) what elements were protectable by copyright; and (2) whether

Grace’s work constituted infringement. Id. at 817-18. Another major issue in that case was

whether Nova had “originality” in the plans, as defined under copyright law, or if they were just

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based on a Holiday Inn Express prototype. Id. at 818. These are “substantial claims founded

directly on federal law” which were sufficient to create federal question jurisdiction.

13. In this matter, unlike in Nova, Count 3 does not hinge on evaluating copyright

law. Rather, it rests solely on who owns the Project design plans. That decision is made by

determining who, under the Design-Build Contract, is granted ownership pursuant to the relevant

facts.

14. The determination whether Cardinal’s termination under the Design-Build

Contract was proper or wrongful is the lynchpin of the copyright claim. The federal Copyright

Act is not implicated in that determination, meaning that Count 3 is entirely derivative of the

breach of contract claim. This is a purely contractual issue and does not create a federal question.

15. International Armor is compellingly analogous to the present case, and its holding

should prevail. DCG’s dispute with Cardinal is a contract dispute. The Design-Build Contract

addresses—and will resolve—ownership of the Project design plans. Consequently, this dispute

about the ownership of a copyright does not arise under federal law, and certainly is not a

“substantial claim founded directly on federal law.” Therefore, even if Count 3 were not

dismissed, this action should be remanded.

16. DCG reiterates its desire to dismiss Count 3, but regardless whether Count 3

remains in DCG’s Complaint, there is no federal question jurisdiction, and the Court should

remand this matter to the Hamilton County courts.

WHEREFORE, DCG, by counsel, respectfully prays for an order remanding this action

to the Hamilton County courts and for all other just and proper relief.

Respectfully submitted:

/s/ J. Michael Cavosie

J. Michael Cavosie, Atty. No. 16674-49

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Elizabeth S. Schmitt, Atty. No. 30146-53

mcavosie@easterandcavosie.com
eschmitt@easterandcavosie.com

EASTER & CAVOSIE

11555 N. Meridian Street, Suite 410
Carmel, IN 46032
(317) 574-0828

Attorneys for Plaintiff, DCG Indiana, Inc.

d/b/a Dillon Construction Group a/k/a
Dillon Construction a/k/a DCG Construction

CERTIFICATE OF SERVICE

I hereby certify that on July 12, 2023, a true and correct copy of the foregoing pleading
was filed electronically. Service of this filing will be made through made on all ECF-registered
counsel by operation of the Court’s electron filing system. Parties may access this filing through
the Court’s system.
/s/ J. Michael Cavosie
J. Michael Cavosie