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Paldo Sign & Display Co. v. Wagener Equities, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 4, 2014

PALDO SIGN AND DISPLAY COMPANY, individually and as the representative of a class of similarly-situated persons, Plaintiffs,

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For Arnold Chapman, individually and as the representive of a class of similarly-situated persons, Plaintiff: Brian J Wanca, LEAD ATTORNEY, Ryan M. Kelly, Anderson & Wanca, Rolling Meadows, IL; Daniel J. Cohen, PRO HAC VICE, James Michael Smith, Jonathan B. Piper, Phillip A. Bock, Tod Allen Lewis, Bock & Hatch, LLC, Chicago, IL.

Paldo Sign and Display Company, Plaintiff, Pro se.

For Wagener Equities, Inc., Daniel Wagener, Defendants: Robert C. Heist, LEAD ATTORNEY, Anne-Marie Foster, R. Connor & Associates, P.C., Chicago, IL.

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John J. Tharp, Jr., United States District Judge.

Before the Court is the plaintiffs' Motion for Partial Summary Judgment in a TCPA junk fax case. For the reasons explained below, the plaintiffs' motion is granted in its entirety.


In February 2014, this Court granted the plaintiffs' Motion for Class Certification and denied defendant Daniel Wagener's Motion to Dismiss. The class definition that the Court certified was:

All persons who were successfully sent a facsimile from " Wagener Equities" on November 9, 2006, or November 10, 2006, stating that people " Looking for Industrial Property" should " Go To:"

The Court appointed Paldo Sign & Display Company as the representative of the class. On March 31, 2014, the Seventh Circuit denied the defendants' motion for leave to appeal the class certification. See Chapman et al. v. Wagener Equities, Inc., et al., 747 F.3d 489 (7th Cir. 2014). The plaintiffs have now filed a motion for partial summary judgment.

The Court assumes familiarity with the background that was set forth in detail in its opinion certifying the class and denying Wagener's motion to dismiss. See Chapman v. Wagener Equities, Inc. and Daniel Wagener, No. 09 C 7299, 2014 WL 540250 (N. D. Ill. Feb. 11, 2014). This opinion addresses only the facts relevant to resolving the present motion, which are taken from the parties' Local Rule 56.1 statements and responses. Only facts that this Court deems material and supported by admissible evidence are included.

The plaintiff class alleges that the defendants violated the Telephone Consumer Protection Act (" TCPA" ), which makes it unlawful for any person " to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement" unless, among other conditions, (1) the " unsolicited advertisement is from a sender with an established relationship with the recipient" and (2) the sender obtained the fax numbers through that established business relationship or from a directory, advertisement, or site on the web to which the recipient voluntarily agreed to make its fax number available for public distribution. 47 U.S.C. § 227(b)(1)(C), (b)(1)(C)(i), (ii). Specifically, the plaintiffs allege that Wagener Equities, Inc., an Illinois corporation involved in commercial real estate, and its president, Daniel Wagener (collectively " WEI" ), directed a company named Business to Business Solutions (B2B) to fax an advertisement to thousands of fax numbers, and that 10,145 different fax numbers received the fax on November 9 and 10, 2006, without the recipients' consent and in violation of the TCPA. Defs. 56.1 Resp. (Dkt. 242) ¶ ¶ 9, 10, 45.

B2B and Macaw: The parties devote substantial energy to debating the respective roles, and relationship, of two businesses: Business to Business Solutions (" B2B" ) and " Macaw," in sending the fax that is at issue in this case. The plaintiffs allege that an individual named Carolyn Abraham, while operating B2B, was involved in fax advertising from August 2005 until September 2007. Id. ¶ 11. B2B approached potential customers and those customers provided draft advertisements designed by the customers themselves.

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Id. ¶ ¶ 15-16. WEI admits that Abraham and B2B " assisted" with the alleged fax broadcasting, but denies that Abraham and B2B " managed the substantive portions of any alleged fax advertising." Id. ¶ ¶ 11, 13. Rather, WEI asserts, the " substantive portions" of the fax advertising business " were managed and controlled by a Romanian entity known as Macaw." Id. ¶ ¶ 11, 13. According to WEI, it was Macaw's independent contractors who communicated directly with customers and controlled the alleged fax transmissions. Id. ¶ ¶ 15-16, 19.

The debate is not directly relevant to the question of WEI's potential liability, but to the question of the admissibility of evidence regarding the transmission of the fax at issue. WEI denies that Abraham (or her son, who assisted her in the business) can authenticate any of the transmission data on which the plaintiffs rely because she has no personal knowledge regarding the fax broadcasting business that is alleged, and also denies that Abraham was personally involved in sending the fax transmissions at issue in this case, communicating with Wagener or anyone else at WEI, sending faxes to prospective clients, maintaining computers used by B2B, removing the hard drive at issue, backing up any B2B data, or compiling lists of fax recipients. Id. ¶ ¶ 17-18; Pls. 56.1 Resp. (Dkt. 248) ¶ 8. WEI adds that Macaw controlled Abraham's computers, and all faxing activity, remotely; the plaintiffs counter that faxes were only sent after Abraham gave instructions to Macaw, including what was to be faxed and when and where it was to be faxed. Pls. 56.1 Resp. ¶ 5. The plaintiffs assert that B2B and Macaw " were engaged in a joint business effort to obtain customers for their fax broadcasting endeavor ... Simply put, the efforts of B2B-Abraham and Macaw were inextricably intertwined as one business operation." Id. ¶ 8.

The plaintiffs also state that B2B marketed itself as " Maxileads" or " Marketing Research Center," but WEI denies this fact, asserting instead that " Maxileads" and " Marketing Research Center" were " letterhead" names and not actual companies or entities. Defs. 56.1 Resp. ¶ 12.

Wagener's Alleged Fax Order: At some point prior to November 7, 2006, Daniel Wagener spoke to an individual on the telephone about " fax broadcasting services." Id. ¶ 21. The plaintiffs claim that this individual was associated with B2B; WEI claims that the individual--who used the false name " Kevin Wilson," but whose name is actually Connor Melville (this opinion will refer to him as Wilson since that is the name he allegedly used)--was not a representative or employee of B2B and " represented himself to be associated with the Marketing Research Center." Id. ¶ 21-22. Wagener spoke to Wilson about sending faxes to " people who would be interested in industrial real estate or have a need for industrial real estate" in Cook, Lake, and DuPage Counties. Id. ¶ 23. Wilson sent Wagener some sample advertisements and then sent his own draft advertisement to Wilson. Id. ¶ 24-25.

Next, Wilson sent Wagener a document describing the process for ordering a fax advertisement, which included detailed instructions to (1) write a check for $668 payable to B2B; (2) make a copy of the check; (3) mail the check to B2B; (4) write on the check copy page, " I have already mailed this check!; " and (5) fax the check copy and note to B2B. Id. ¶ 27. The instructions also stated, " We will start your marketing campaign immediately, if you fax us a copy of our payment check after you mail it; " " To begin your program immediately, follow these simple instructions; " and " Although we will start your campaign immediately upon receipt of

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your fax ( unless you tell us to wait ), we will not deposit your payment until after we have transmitted your messages." Id. (emphasis added). The instructions further stated, " IMPORTANT: We are trusting your word, but we can only transmit your messages immediately if your check copy is received WITH your signed declaration ...

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