Gorss Motels, Inc. v. Brigadoon Fitness Inc.

GORSS MOTELS, INC., a Connecticut corporation,individually and as the representative of a class of similarly-situated persons, Plaintiffs, v. BRIGADOON FITNESS INC., an Indiana corporation,BRIGADOON FINANCIAL, INC., an Indiana corporation,and JOHN DOES 1-5, Defendants.

CASE NO.: 1:16-CV-330-HAB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA FORT WAYNE DIVISION

January 26, 2021

OPINION AND ORDER

In 1944, vaudesvillian Jimmy Durante made popular the phrase "the guy's making a federal case out of it."¹ The expression is particularly apropos in the present case as Gorss Motels ("Gorss") received a single facsimile transmission from Defendants Brigadoon Fitness, Inc. and Brigadoon Financial, Inc. (collectively, "Brigadoon") and literally made it a federal case. Gorss filed this federal lawsuit² seeking redress for the offense under the Telephone Consumer Protection Act (TCPA) of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227.³

Presently before the Court are the parties' cross-motions for summary judgment. (ECF Nos. 129, 133). The motions have been fully briefed and supplemented (ECF Nos. 134, 140, 145-148), and are ripe for consideration.

APPLICABLE STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the initial responsibility of informing the district court of the basis of its motion and identifying those portions of designated evidence that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After "a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S.242, 250 (1986) (quotation marks and citation omitted).

A factual issue is material only if resolving the factual issue might change the outcome of the case under the governing law. See Clifton v. Schafer, 969 F.2d 278, 281 (7th Cir. 1992). A factual issue is genuine only if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party on the evidence presented. See Anderson, 477 U.S. at 248. In deciding a motion for summary judgment, the court "may not 'assess the credibility of witnesses, choose between competing reasonable inferences, or balance the relative weight of conflicting evidence.'" Bassett v. I.C. Sys., Inc., 715 F. Supp. 2d 803, 808 (N.D. Ill. 2010) (quoting Stokes v.Bd. of Educ. of the City of Chi., 599 F.3d 617, 619 (7th Cir. 2010)). Instead, it must view all theevidence in the record in the light most favorable to the non-moving party and resolve all factual disputes in favor of the non-moving party. See Anderson, 477 U.S. at 255.

The fact that the parties have filed cross-motions for summary judgment does not alter the standard. When evaluating each side's motion, the court simply "construe[s] all inferences in favor of the party against whom the motion under consideration is made." Metro. Life Ins. Co. v. Johnson, 297 F.3d 558, 561-62 (7th Cir. 2002) (quoting Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998)).

FACTUAL BACKGROUND⁴

Beginning in the fall of 1988, Gorss began operating a Super 8 Motel pursuant to a series of franchise agreements, originally with Super 8 Motels, then with Super 8 Worldwide, Inc. (collectively, "Super 8").⁵ Wyndham Hotels Group, LLC which, in turn, is owned by Wyndham Worldwide Corporation (collectively "Wyndham"), eventually acquired Super 8 Worldwide, Inc. Defendant Brigadoon sells commercial fitness equipment, accessories, and related items to the hospitality industry. Brigadoon, as a party to a separate agreement with Wyndham, became a Wyndham approved supplier to provide its commercial fitness equipment to Wyndham affiliates, including Gorss. To this end, on April 17, 2013, Brigadoon, through its fax broadcaster, sent a facsimile transmission to Gorss' subscribed fax line advertising its products. ("the 2013 Fax").

a. The Franchise Agreements

Super 8/Wyndham and Gorss entered into three separate franchise agreements: a 1988 Franchise Agreement spanning 20 years (1988 Agreement); a 2009 Amendment executed afterWyndham acquired Super 8 and extending the franchise agreement under the Wyndham umbrella for an additional 5 years (2009 Amendment); and a completely new 2014 Franchise Agreement borne after the 1988 Agreement and the 2009 Amendment expired.

The 1988 Agreement granted Gorss a non-exclusive twenty-year franchise to operate a Super 8 motel in Cromwell, Connecticut. (ECF No. 65-4, Exh. C at 97). As part of its obligations under the 1988 Agreement, Gorss agreed to "furnish motel accommodations, services and conveniences of the same high quality and distinguishing characteristics as provided at Super 8 Motels in and around the United States." (Id. at 97). The 1988 Agreement also required Gorss, in a section headed "System Quality," to follow "the specifications and quality of items of personal property to be used in the franchised motel established by [Super 8]." Gorss further agreed "to purchase from [Super 8], or from such other vendor as [Super 8] may approve from time to time, or from any source whose supplies and equipment have been approved in writing by [Super 8], prior to acquisition..." certain listed items. (Id. at 102).⁶ Gorss acknowledges that Super 8, later Wyndham, had an approved list of vendors that was supplied to Gorss via a catalog. (ECF No. 65-4, Gorss Dep. at 35-36). Gorss further acknowledges that while the vendors' identity was made known to it through the catalog, it was not required to purchase from those vendors if it received prior approval from Super 8/Wyndham to purchase through another vendor. (Id).

The 1988 Agreement does not include any express language discussing the sending of advertising materials by approved vendors of Super 8 and neither the 1988 Agreement, nor the 2009 Amendment extending it, contain Gorss' fax number. In fact, the 1988 Franchise Agreementdoes not contain the words "facsimile" or "fax" anywhere in it. The 2009 Amendment, the contract in place at the time that the 2013 Fax was sent by Brigadoon to Gorss, does mention the word "facsimile" or "fax" but in a context irrelevant to the issues presented in this case.⁷ These agreements do not contain language, later added to the 2014 Agreement, that Super 8 may "offer optional assistance to [Gorss] with purchasing items used at or in the Facility" or that affiliates of Super 8 may offer this service on their behalf.

The 2014 Agreement, signed over 18 months after Brigadoon sent the 2013 Fax, contained the aforementioned new language and additional requirements regarding Wyndham's marketing and approved supplier programs. Section 4.4 of the 2014 Agreement provides as follows:

We may offer optional assistance to you with purchasing items used at or in the facility. Our affiliates may offer this service on our behalf. We may restrict the vendors authorized to sell proprietary or Mark-bearing items in order to control quality, provide for consistent service or obtain volume discounts. We will maintain and provide to you lists of suppliers approved to furnish Mark-bearing items, or whose products conform to System Standards.

(ECF No. 130 at ¶ 16).⁸ This section does not designate the manner by which affiliates may offer services and does not mention "fax" or "facsimile" or refer to "advertising" or "advertisements."

(Id.). However, Gorss provided its fax number under Section 17 titled "Legal Matters" and Section 17.3 titled "Notices." Specifically, Section 17.3 authorizes five means of delivering written notices: (1) facsimile transmission; (2) delivery service; (3) first class mail; (4) electronic mail; and (5) "by such other means as to result in actual or constructive receipt..." This section then goes on to provide the names, addresses, facsimile numbers and email address for Gorss and Wyndham immediately below.

b. Instances of Fax Number Disclosure by Gorss

Throughout the term of its 1988 Agreement and subsequent 2009 Amendment, Gorss made its fax number public by participating in the Super 8 Motel and Wyndham directories. (ECF No. 65-4, Gorss Dep. at 23-25). These directories, published annually, provided information to consumers regarding the whereabouts of Super 8 Motels and provided contact information. Gorss testified that the directories were published solely "for the public to know where the Super 8's were located." (Id. at 25). In fact, Super 8 was required by the 1988 Agreement to "issue from time to time for distribution among travelers and Super 8 Motel customers a directory containing the names, addresses, and other information concerning all Super 8 Motels in good standing." (ECF No. 65-4 at 106).

In the period after the 2009 Amendment, Gorss provided its fax number to Wyndham on a few occasions. In 2010, and again in 2015, it submitted a "Site Contact Form" to Wyndham providing the fax number for the hotel in addition to other information. Neither Site Contact Form mentions promotions, advertising, or marketing. The Site Contact Forms merely requested, and Gorss provided, its phone number, email address, and fax number. (ECF No. 130 at ¶ 14). In addition to the Site Contact Forms, in April 2012, Gorss attended a global trade show hosted by Wyndham and provided its fax number when it registered for the show.

At different times, (the dates are unclear or missing in the record), Wyndham held conventions for franchisees. Gorss registered for the conventions and provided its facsimile number. At the convention, Wyndham vendors set up booths and promotional displays for their products. Gorss interacted with some of these approved suppliers by participating in a lottery where "if we swiped our badge, we would have a chance to win a prize." (Gorss...