Gorss Motels, Inc. v. Eric Ryan Corp., No. 3:17cv126 (DJS)

461 F.Supp.3d 5

GORSS MOTELS, INC., Plaintiff,

v.ERIC RYAN CORPORATION, Defendant.¹

No. 3:17cv126 (DJS)

United States District Court, D. Connecticut.

Signed May 21, 2020

Aytan Y. Bellin, Bellin & Associates, LLC, White Plains, NY, Ryan Michael Kelly, Anderson & Wanca, Rolling Meadows, IL, for Plaintiff.

Christopher A. Cafardi, Pro Hac Vice, Ryan D. DeMotte, Pro Hac Vice, Cafardi Ferguson Wyrick Weis & Stotler, LLC, Sewickley, PA, Jonathan M. Shapiro, Aeton Law Partners LLP, Middletown, CT, for Defendant.

RULING ON MOTIONS FOR SUMMARY JUDGMENT

Dominic J. Squatrito, United States District Judge

The plaintiff, Gorss Motels, Inc. ("Gorss"), alleges that the defendant, The Eric Ryan Corporation ("Eric Ryan"), violated the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 ("TCPA"), by sending three unsolicited facsimile advertisements ("faxes") to Gorss during the time period between March 1, 2013, and December 1, 2013. Both parties have moved for summary judgment. For the reasons stated below, Gorss's motion for summary judgment is granted and Eric Ryan's motion for summary judgment is denied.

I. FACTS

Gorss formerly operated a Super 8 Motel in Connecticut as a franchisee of the Wyndham Hotel Group ("Wyndham"). Eric Ryan provides telecommunications and utility services, including auditing utility and telephone bills and providing consulting services relating to such bills.

In 1988 Gorss entered into a Franchise Agreement with Super 8 Motels, Inc. ("Super 8") that granted Gorss the right to operate a Super 8 Motel in Cromwell, Connecticut for a term of 20 years. The Franchise Agreement included the following language:

[T]he specifications and quality of items of personal property to be used in the franchised motel are established by FRANCHISOR [Super 8] from time to time to insure operation in accordance with FRANCHISOR'S standards, and further, [FRANCHISEE, i.e., Gorss] agrees to purchase from FRANCHISOR, or from such other vendor as FRANCHISOR may approve from time to time, or from any other source whose supplies and equipment have been approved in writing by FRANCHISOR, prior to acquisition, as meeting the standards and specifications designated by FRANCHISOR or conforming to the specimens or samples submitted or otherwise made available to FRANCHISEE by FRANCHISOR to preserve the uniformity of its System, the following items: mattresses, box springs, bed frames, dresser-desks, chairs for use in guest rooms, nightstands, desk lamps, luggage racks, carpeting, drapes, sheets, blankets, pillows, pillowcases, bedspreads, towels, washcloths, bath mats, facial tissue, toilet tissue, soap, soap wrappers, matches, television receivers, and cabinets. FRANCHISOR shall not unreasonably withhold approval of such sources for personal property.

(Doc. # 77-4, at 17). On March 11, 2009, Gorss and Super 8² extended the 1988 Franchise Agreement for an additional five years, with an expiration date of August 15, 2014. Neither the original 1988 Franchise Agreement nor the 2009 five-year extension of that agreement contained a fax number for Gorss.

On January 20, 2010, Gorss submitted a "Site Contact Form" to Wyndham. The "Current Contact Information" sections of that form listed the same fax number ((860) 632-8889) for all categories of contacts, i.e., "Entity Principal Contact," "Site Principal Contact," "General Manager," and "Customer Care." (Doc. # 96-1, at 2-3). During the time it operated a Super 8 Motel in Connecticut, Gorss had one fax machine, which was located behind the motel's front desk and had the fax number (860) 632-8889.

On September 10, 2014, Gorss and Super 8 Worldwide, Inc. entered into a new 20-year Franchise Agreement. Section 4.4 of the 2014 Franchise Agreement provided 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.

(Doc. # 77-4, at 44, ¶ 4.4).

Wyndham Hotel Group is owned by Wyndham Worldwide Corporation. The predecessor of Wyndham Worldwide Corporation, Hospitality Franchise Systems, Inc., acquired Super 8 Worldwide, Inc. in 1993.

Worldwide Sourcing Solutions, Inc. ("WSSI") is a wholly owned subsidiary of Wyndham Hotels & Resorts, Inc. and an affiliate of Wyndham. Through its Approved Suppliers program WSSI supports Wyndham franchisees by negotiating prices, volume discounts, and commissions for products and services of third parties designated as Approved Suppliers. WSSI would often enter into an agreement with a vendor (a "Worldwide Sourcing Agreement") whereby the vendor would be designated as an Approved Supplier. As an Approved Supplier, a vendor could offer products or services for purchase or use by Wyndham franchisees and would pay commissions to WSSI. The Approved Supplier program offered discounts to Wyndham franchisees from the Approved Suppliers. Except as to certain items a franchisee was required to purchase from Approved Suppliers, a franchisee's participation in the Approved Supplier program was voluntary.

Wyndham and WSSI disclosed and promoted the Approved Supplier program to franchisees in various ways, including publishing and distributing a "Supplier Directory" to franchisees that identified Approved Suppliers; providing Approved Suppliers with the opportunity to participate at global conferences held for franchisees; and providing franchisees with on-line information regarding Approved Suppliers. WSSI also provided Approved Suppliers with the opportunity to participate in a marketing program in which WSSI arranged for a third party to send faxes to franchisees. Faxes sent through that program were sent to franchisees who had provided their fax numbers to Wyndham or its affiliates.

On October 15, 2010, WSSI and Eric Ryan entered into a Worldwide Sourcing Agreement (the "WSA") pursuant to which Eric Ryan became an Approved Supplier and WSSI agreed to promote Eric Ryan's goods and services to Wyndham franchisees. Eric Ryan paid a marketing fee to WSSI for these promotional services. Eric Ryan was an Approved Supplier from October 2010 through 2013.

Pursuant to the WSA, Eric Ryan was permitted to provide Wyndham with content for five faxes, as well as advertising information for placement on Wyndham's website and in a Wyndham sponsored catalog for the benefit of Wyndham franchisees. Eric Ryan was never provided with databases or contact lists of Wyndham franchisees.

In January 2013 a Wyndham employee requested that Eric Ryan provide content for a "Fax Blast"³ to be sent by Wyndham to its franchisees. Eric Ryan responded to the request by preparing a flyer providing its contact information and a summary of its services. The flyer was sent to Wyndham for its review and approval with the understanding that it would be sent by Wyndham via fax to Wyndham's franchisees pursuant to the WSA.

Flyers promoting Eric Ryan's goods and services were faxed to various Wyndham franchisees, including Gorss, on March 1, 2013, November 1, 2013, and December 1, 2013. All three faxes (collectively "the Faxes") were successfully sent to Gorss's fax number, i.e., 860-632-8889.

Wyndham was a customer of Western Printing, a commercial printing company. On behalf of Wyndham, Western Printing arranged for the Faxes to be transmitted by a fax broadcasting service named WestFax. Wyndham decided which fax numbers would be targeted for each of the three faxes and paid Western Printing for its services. Eric Ryan had no business relationship with Western Printing and never had any direct contact with WestFax.

All of the Faxes advertised the commercial availability of Eric Ryan's services. By way of example, the March 1, 2013 fax included the following language: "Sign Up Now For a Free Utility and Telecommunications Bill Review....With no up-front cost, no obligations and flexible ‘fee for service’ options, Eric Ryan Corporation makes it easy for its hospitality clients to set and implement their own cost-cutting priorities for the benefit of their properties." (Doc. # 73-2, at 2). Each fax listed contact information (website, email address, phone number) where prospective clients could obtain further information about Eric Ryan's services. At the bottom of each fax, in smaller print, was the following sentence: "To opt out from future faxes, email strategic.sourcing@wyn.com or call this toll-free number: (877) 764-4212." (Id. at 2, 4, 6).

At no time did Gorss attempt to contact Wyndham or WSSI to opt out of faxes advertising the goods and services of Eric Ryan. Gorss sold the Cromwell Super 8 Motel in August 2016.

II. STANDARD

A motion for summary judgment shall be granted "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). Summary judgment is appropriate if, after discovery, the nonmoving party "has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "The burden is on the moving party to demonstrate the absence of any material factual issue genuinely in dispute." American International Group, Inc. v. London American International Corp. , 664 F.2d 348, 351 (2d Cir. 1981) (internal quotation marks omitted).

A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute concerning a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the...