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G.M. Sign, Inc., An Illinois Corporation, Individually and As A v. Elm Street Chiropractic

May 15, 2012

G.M. SIGN, INC., AN ILLINOIS CORPORATION, INDIVIDUALLY AND AS A REPRESENTATIVE OF A CLASS OF SIMILARLY-SITUATED PERSONS, PLAINTIFF,
v.
ELM STREET CHIROPRACTIC, LTD. AND JOHN DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Virginia M. Kendall United States District Court Judge Northern District of Illinois

Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff G.M. Sign, Inc. ("G.M. Sign") sent a one-page unsolicited fax advertisement to Defendant Elm Street Chiropractic, Ltd. ("Elm Street") on September 7, 2011. In response, G.M. Sign filed this three-count Class Action Complaint in the Circuit Court of Lake County, Illinois, alleging violations of state and federal law. On October 12, 2011, Elm Street removed this action to federal court pursuant to 28 U.S.C. §§ 1331, 1441, and 1446. G.M. Sign purports to represent a class of similarly situated plaintiffs, but at this time no class has been certified. The Complaint alleges that Elm Street violated the Federal Telephone Consumer Protection Act, 47 U.S.C. § 227 (Count I), committed common law conversion of paper, toner and employees' time (Count II), and violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 (Count III). Elm Street moves to dismiss Counts II and III of the Complaint for failure to state a claim upon which relief can be granted. For the reasons set forth below, Elm Street's Motion to Dismiss is granted and Counts II and III are dismissed with prejudice.

I. BACKGROUND

On March 15, 2011, G.M. Sign received on its fax machine a one-page advertisement from Elm Street. (Cplt. ¶11). G.M. Sign claims that Elm Street also faxed the same ad to more than 39 other recipients without their express permission and without displaying a phone number for the recipient to call and prevent future faxes. (Cplt. Ex. A). G.M. Sign lost a single sheet of paper and whatever amount of ink or toner was used in printing that page. (Cplt. ¶37). In Count One, G.M. Sign alleges that Elm Street violated the Federal Telephone Consumer Protection Act ("FTCA") by faxing an unsolicited advertisement. See 47 U.S.C. § 227. Count II of the Complaint states an Illinois common law claim of conversion, premised on the theory that Elm Street misappropriated G.M. Sign's fax machine, paper, toner, and time. Count III of the Complaint alleges that Elm Street violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") by unfairly sending the unsolicited fax. See 815 ILCS 505/2.

II. STANDARD

When considering a Rule 12(b)(6) motion, the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the non-moving party. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). To properly state a valid claim, the complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that, when "accepted as true ... 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To determine whether a complaint meets this standard the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1950. If the factual allegations are well-pleaded, the Court assumes their veracity and then turns to determine whether they plausibly give rise to an entitlement to relief. See Id. A claim has facial plausibility when its factual content allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See Id. at 1949. Furthermore, "Twombly teaches that a defendant should not be forced to undergo costly discovery unless the complaint contains enough detail, factual or argumentative, to indicate that the plaintiff has a substantial case." Bissessur v. Indiana Univ. Bd. of Trustees, 581 F.3d 599, 603 (7th Cir. 2009).

III. DISCUSSION

Elm Street moves to dismiss the conversion claim arguing that it never deprived G.M. Sign of possession of its property-and even if it did, converting one piece of paper and a trivial amount of toner is de minimis. Elm Street also argues that it did not violate the ICFA because advertising by fax does not amount to an unscrupulous practice resulting in actual and substantial injury.

A. Conversion under Illinois Common Law

Under Illinois common law, a plaintiff who seeks to state a claim for conversion must allege: "(1) an unauthorized and wrongful assumption of control, dominion, or ownership by defendant over plaintiff's personalty; (2) plaintiff's right in the property; (3) plaintiff's right to the immediate possession of the property, absolutely and unconditionally; and (4) a demand for possession of the property." General Motors Corp. v. Douglass, 565 N.E.2d 93, 96-97 (Ill. App. Ct.1990). An "unauthorized and wrongful assumption of control, dominion, or ownership" is an essential element of a claim for conversion under Illinois law. See Craig v. City Corp. Savings, 578 N.E.2d 1331, 1335 (Ill. App. Ct. 1991). G.M. Sign asserts that Elm Street assumed control over its paper, toner, and ink by transmitting to it an unauthorized fax. However, Elm Street claims that it never came into possession of G.M. Sign's property, as its fax machine, paper, toner, and ink remained at all times in the control of G.M. Sign.

Nevertheless, a claim for conversion may exist where the defendant did not exercise dominion or control over the property if the defendant "intentionally destroys a chattel or so materially alters its physical condition as to change its identity or character." Restatement (Second) of Torts § 226; see e.g., Loman v. Freeman, 890 N.E.2d 446 (2008). Some courts have held that an unsolicited fax may give rise to such a conversion claim. See e.g. Brodsky v. Humanadental Insurance Co., No. 10 C 3233, 2011 WL 529302 (N.D. Ill. Feb. 8, 2011) (Holderman, J.) (holding that conversion claim was sufficiently alleged and not barred by the de minimis doctrine); Glen Ellyn Pharmacy, Inc. v. Meda Pharmaceuticals, Inc. et al., No. 09 C 4100, 2011 WL 196925 (N.D. Ill. Jan. 13, 2011) (Gottschall, J.) (same); Green v. Anthony Clark Intern. Ins. Brokers, Ltd., No. 09 C 1541, 2009 WL 2515594 (N.D. Ill. Aug. 17, 2009) (Kennelly, J.) (same); R. Rudnick & Co. v. G.F. Protection, Inc., No. 08 C 1856, 2009 WL 112380 (N.D. Ill. Jan. 15, 2009) (Gottschall, J.) (same); Pollack v. Cunningham Financial Group, LLC, No. 08 C 1405, 2008 WL 4874195 (N.D. Ill. June 2, 2008) (Hibbler, J.) (same); Sadowski v. Med1 Online, LLC, No. 07 C 2973, 2008 WL 2224892 (N.D.

Ill. May 27, 2008) (Aspen, J.) (same); Centerline Equip. Corp. v. Banner Personnel Services, Inc., 545 F. Supp. 2d 768 (N.D. Ill. 2008) (Pallmeyer, J.) (same, although "no individual plaintiff has suffered any great loss," aggregating harm could permit a claim for nominal damages"). These cases rely on the premise that under Illinois law "the essence of conversion is not acquisition by the wrongdoer but a wrongful deprivation of the owner thereof." Id. (quoting Jensen v. Chi. and W. Ind. RR., 419 N.E.2d 578, 593 (Ill. App. Ct. 1981)). The idea here being that Elm Street materially altered G.M. Sign's property by printing its advertisement onto G.M. Sign's paper using G.M. Sign's toner. Under this theory, G.M. Sign may sufficiently establish that Elm Street converted its property despite the fact that Elm Street did not ever physically possess the fax machine, the paper or the toner. See Savanna Group, Inc. v. Truan, No. 10 C 7995, 2011 WL 703622 at *2 (N.D. Ill. Feb. 22, 2011) (St. Eve, J.); G.M. Sign, Inc. v. Stergo, 681 F. Supp. 2d 929, 932 (N.D. Ill. 2009) (Zagel, J.); Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F.Supp.2d 610');">633 F. Supp. 2d 610, 613 (N.D. Ill. 2009) (Kapala, J.).*fn1

Yet there is more to the analysis. If the conversion was de minimus---resulting in damages that are minuscule, and mere inconveniences---then the conversion claim must fail. See Brandt v. Board of Educ. of City of Chicago, 480 F.3d 460, 465 (7th Cir. 2007) (holding that damages which are "minuscule to the point of nonexistent" are de minimis); People v. Durham, 915 N.E.2d 40 (Ill. App. Ct. 2009) (the "maxim de minimis non curat lex...retains force in Illinois."); Savanna Group, Inc. v. Truan, No. 10 C 7995, 2011 WL 703622 (N.D. Ill. Feb. 22, 2011) (St. Eve, J.) (finding that the de minimis doctrine precluded a claim for conversion); Garrett v. Rangle Dental Lab, No. 10 C 1315, 2010 WL 3034709 (N.D. Ill. Aug 3, 2010) (Bucklo, J.) (same); Paldo Sign & Display Co. v. Topsail Sportswear, Inc., No. 08 C 5959, 2010 WL 276701 (N.D. Ill. Jan. 15, 2010) (Andersen, J.) (same); ABC Business Forms, Inc. v. Pridamor, Inc., No. 09 C 3222, 2009 WL 4679477 (N.D. Ill. Dec. 1, 2009) (Guzman, J.) (same); G.M. Sign, Inc. v. Stergo, 681 F. Supp. 2d 929 (N.D. Ill. 2009) (Zagel, J.) (same); Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F.Supp.2d 610');">633 F. Supp. 2d 610 (N.D. Ill. 2009) (Kapala, J.) ...


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