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ATTORNEY FOR APPELLANT Robert T. Faulkner Evansville, Indiana

ATTORNEYS FOR APPELLEE Catherine Nestrick Andrew Ozete James E. Gentry, Jr. Evansville, Indiana

FILED
May 19 2009, 10:26 am
of the supreme court, court of appeals and tax court

In the

CLERK

Indiana Supreme Court
No. 82S04-0806-CV-00309 DENNIS CONWELL AND FRANK SPLITTORFF, D/B/A PIECE OF AMERICA,

Appellant (Defendant below), v. GRAY LOON OUTDOOR MARKETING GROUP, INC., Appellee (Plaintiff below). Appeal from the Vanderburgh Superior Court, No. 82D03-0503-PL-1340 The Honorable Robert J. Pigman, Judge On Petition to Transfer from the Indiana Court of Appeals, No. 82A04-0609-CV-00488

May 19, 2009 Shepard, Chief Justice. As the Internet becomes a ubiquitous presence in American commerce, the nations courts work to find satisfactory legal frameworks for resolving the disputes that inevitably arise. In this suit between a business enterprise and the marketing firm that created and hosted its website, we conclude that the Uniform Commercial Code does not apply and that the web design

firm may collect for its work under principles of common law contract. As for a counter-claim alleging conversion of the intellectual product, we conclude that copyright law supports ownership by the designer. We affirm the trial courts judgment for the marketing firm.

Facts and Procedural History

In November 2003, Piece of America was a limited partnership pursuing the sale of novelty packages: one-square-inch parcels of land in each of the fifty states. The general partners were F.W. Splittorff, Dennis Conwell, and Robert Aswell. To market and sell its products, Piece of America sought to establish a website. None of the partners had any

sophistication in Internet technologies or website design, so they approached Gray Loon Marketing, which provides various marketing and communication services, to design and publish its website. In September 2003, Gray Loon gave POA a design proposal for the website and an estimated price of $8,080. Among other things, Gray Loons proposal for POAs package stated, "It is Gray Loons philosophy that clients have purchased goods and services from us and that inherently means ownership of those goods and services as well." (Appellants App. at 59.)

Piece of America agreed to the proposal and paid a 50% deposit, and design commenced. During the design process, POA asked for a few minor changes, none of which requests were written down. Gray Loon finished the site in December 2003 at a final cost of about $8,500. Once the website was running to POAs satisfaction, it paid Gray Loon in full during the first quarter of 2004. Both parties undisputedly fulfilled their obligations under the agreement of November 2003.

In April 2004, POA requested that Gray Loon make several changes, some of which required major programming work. In particular, POA wanted to allow customers to make two payments in purchasing its packages. Gray Loon agreed over the phone to make these changes, and, following its policy, Gray Loon immediately began the requested alterations. Piece of

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America did not request a proposal or a quote, and Gray Loon did not provide one. Gray Loon did produce an internal memorandum outlining the changes, but did not supply it to POA. Piece of America did not request that Gray Loon save a copy of the original website before it made the alterations, and Gray Loon does not regularly do so without such a request. Once Gray Loon completed the modifications, Gray Loon contacted POA for approval to post the modifications. At that time, POA told Gray Loon that it did not want to implement the system for two payments by consumers. Gray Loon subsequently sent POA a bill for $5,224.50.

Gray Loon made several phone calls attempting to collect the bill. Gray Loon owner Jonathan Ruthenburgh talked to Dennis Conwell (the contact person representing POA to Gray Loon) a week or so after the net 30 days invoice went unpaid

Download Dennis Conwell and Frank Splittorff, d/b/a Piece of America v. Gray Loon Outdoor

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