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Loncarevic & Associates, Inc. v. Stanley Foam Corp.

Court of Appeals of Illinois, First District, Second Division

February 7, 2017

LONCAREVIC AND ASSOCIATES, INC., an Illinois Corporation, Individually and as the Representative of a Class of Similarly-Situated Persons, Plaintiff-Appellee,
v.
STANLEY FOAM CORPORATION, Defendant-Appellant.

         Appeal from the Circuit Court of Cook County No. 09 CH 15403 Honorabl e David Atkins, Judge Presiding.

          JUSTICE PIERCE delivered the judgment of the court, with opinion. Justices Neville and Simon concurred in the judgment and opinion.

          OPINION

          PIERCE, JUSTICE

         ¶ 1 On two separate occasions in 2006, plaintiff Loncarevic and Associates, Inc. received an unsolicited one-page fax advertisement at its office in Illinois promoting the upholstery services of defendant, Stanley Foam Corporation. Thereafter, plaintiff brought a class action suit against defendant, claiming that the fax advertisements violated section 227 of the Telephone Consumer Protection Act of 1991 (47 U.S.C. § 227) (2006) (TCPA), section 2 of the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2006)), and gave rise to a common-law claim for conversion. The circuit court granted summary judgment in favor of plaintiff on its TCPA claim, and defendant filed the instant appeal.

         ¶ 2 This appeal considers whether summary judgment was properly granted in favor of plaintiff on its TCPA claim. Defendant admits that (1) the faxes advertised its business, (2) the faxes were prepared at the direction of its independent contractor, (3) defendant paid for transmitting the faxes, and (4) it is liable for the unsolicited faxes sent to recipients in the New York, New Jersey, and Connecticut (tristate area). However, defendant contends it is not liable for the faxes sent to plaintiff (received in Illinois) because defendant never authorized the sending of faxes outside of the tristate area. Defendant argues that there are genuine issues of material fact regarding the authority of the independent contractor it employed and the company that broadcasted the faxes that should be decided by a jury.

         ¶ 3 Plaintiff contends that defendant is "directly liable" for the faxes which indisputably advertised defendant's business. The evidence adduced through discovery shows the owner of Stanley Foam gave its employee broad authority to make any decisions regarding the fax campaign, and this is sufficient to show the faxes were sent "on behalf of" defendant.

         ¶ 4 For the following reasons, we affirm the judgment of the circuit court.

         ¶ 5 BACKGROUND

         ¶ 6 Plaintiff is a furniture restoration company domiciled in Illinois. Defendant, a New Jersey corporation, is a wholesale seller of foam and upholstery supplies.

         ¶ 7 Plaintiff filed a class action complaint alleging receipt of a one-page unsolicited fax on May 25, 2006, and July 27, 2006, advertising the services of Stanley Foam. Pertinent to this appeal, one of plaintiff's claims alleged that defendant violated section 227 of the TCPA (47 U.S.C. § 227) (2006) in sending plaintiff the two unsolicited advertising faxes. The TCPA prohibits the sending of unsolicited fax advertisements and provides that monetary damages may be recovered for each violation in the amount of the party's actual pecuniary loss or $500, whichever is greater. 47 U.S.C. § 227 (2006).

         ¶ 8 The following facts appear in the record and were cited by the parties in their summary judgment briefs.

         ¶ 9 Richard Duranne testified at his deposition that he was the sole owner of Stanley Foam from 1989 until he sold it in 2008. There were five employees. In 2006, Duranne hired Bob Christie, [1] an independent contractor, as a bookkeeper who worked part-time. Duranne's day-today responsibilities were to assist with daily operations and paperwork. The types of advertising he did were mostly flyers sent to customers in their customer base. He would send them postcards or flyers with advertising specials. In 2006, defendant began fax advertising. When asked who made that decision, Duranne answered, "Bob Christie. I gave him complete authority." When Christie approached Duranne with a proposal with rates for fax advertising, Duranne "told him, Bob, the only thing that it would help us with is if it was close to our shipping point. And I mentioned to him and I gave him a couple notes, because I wanted him to understand it was basically the northeastern area, close to where we operate out of. Shipping becomes a big factor in that." Duranne later left Christie a note saying "Bob, if you are going to do any type of advertising, you have to keep it close to our facility, because we can't ship any other way." When Christie saw the note, he told Duranne, "I understand, and we're going to keep it very close." According to Duranne, this "very close" area included New York, New Jersey, Connecticut, and portions of Pennsylvania. Duranne never authorized faxes to be sent outside the tristate area.

         ¶ 10 Later, when Christie informed Duranne that he contracted with a company to send faxes on behalf of Stanley Foam, Duranne responded, "[w]ell, if you've checked it thoroughly and you think it's good, then you do what you think is best." At his deposition, Duranne reviewed a copy of a fax Christie sent to Business to Business Solutions (B2B), the marketing company that actually sent the faxes, and recognized Christie's handwriting on it. While Duranne testified to approving the fax advertisement campaign, he nonetheless claimed to have had little involvement in the specifics. He testified that he cannot recall seeing more than one of the fax advertisements and that Christie "had control over everything. I didn't, he was doing a fine job." In fact, Duranne was not aware of B2B or that Stanley Foam was its client. Other than telling Christie to "stay specifically in close areas to our company business, " he did not have any other conversation with Christie about coverage for the Stanley Foam fax campaign. Duranne gave Christie "full control so that he did what he thought was best for the company advertisement." Duranne did not investigate whether it was legal to send advertising faxes and he did not know if Christie did such an investigation. If Duranne had known defendant could be liable for sending the unsolicited advertising faxes, he would "absolutely not" have authorized Christie to pursue fax advertising.

         ¶ 11 Caroline Abraham, owner of B2B, was also deposed. Her deposition largely concerned the general structure and operations of B2B. Abraham would fax an advertisement to potential clients about fax advertising opportunities and their pricing. On April 27, 2006, B2B faxed such a form to defendant which requested information about Stanley Foam's business for use in preparing a fax advertisement. Abraham was uncertain whether the communications from defendant were sent by Duranne, Christie, or someone else. She never sought clarification as to the specific person communicating on behalf of Stanley but had no doubt that Christie had the authority to order the advertising faxes. One fax B2B received from Stanley Foam lists "Bob" as the sender, but another fax message had Duranne's name on it. In B2B's client list, Duranne is listed as the contact name for Stanley Foam, with a "comment" of "contact Bob Christie, account 392." Abraham also testified that she was aware from Christie's prior fax that defendant wanted to send the faxes to "New Jersey ...


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