Kostovetsky v. Ambit Energy Holdings, LLC

242 F.Supp.3d 708

Oleg KOSTOVETSKY, individually and on behalf of all others similarly situated, Plaintiff,

v.AMBIT ENERGY HOLDINGS, LLC, Ambit Midwest, LLC, Ambit Texas, LLC, Ambit Northeast, LLC, Ambit New York, LLC, Ambit Marketing, LLC, Ambit Illinois, LLC, Ambit California, LLC, Ambit Holdings, LLC, Ambit New Jersey, LLC, Ambit Management, Inc., Ambit Group, L.P., Ambit Systems, Inc., Jere Thompson, Jr., Chris Chambless, and John Does 1–100, Defendants.

15 C 2553

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

Signed March 10, 2017

Mark Thomas Vazquez, Steve W. Berman, Andrew James Gordon, Daniel J. Kurowski, Elizabeth A. Fegan, Hagens Berman Sobol Shapiro LLP, Chicago, IL, for Plaintiff.

Nylin Jennifer Meghan Nylin, Michael W. Stockham, Stephen C. Rasch, Thompson & Knight LLP, Dallas, TX, Michael D. Sher, Neal, Gerber & Eisenberg, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Gary Feinerman, United States District Judge

Oleg Kostovetsky alleges in this putative class action that Jere Thompson, Jr., Chris Chambless, Ambit Energy Holdings, LLC, Ambit Illinois, LLC, and several other Ambit entities (collectively, "Ambit"), along with 100 unnamed Ambit consultants, perpetrated a scheme to defraud him and thousands of other natural gas customers in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. , and state unjust enrichment law. Doc. 1. Kostovetsky alleges that Ambit and one of its consultants duped him into signing up for Ambit Illinois's services by fraudulently promising savings on his gas bill, when in fact he ended up paying much higher prices to Ambit Illinois than he would have paid to his former provider.

Earlier in the litigation, the court denied Ambit's motion to dismiss. Docs. 64–65 (reported at 2016 WL 105980 (N.D. Ill. Jan. 8, 2016) ). Ambit now moves for summary judgment. Doc. 67. On the day Kostovetsky filed his summary judgment response, his attorneys moved on behalf of Amanda Argentieri, an Ambit customer from New York, to intervene as a party plaintiff. Doc. 105. Along with its summary judgment reply, Ambit filed a motion to strike arguments in Kostovetsky's summary judgment response that it believes press theories of liability not pleaded in his complaint. Doc. 131.

Meanwhile, three other Ambit customers—Taurshia Simmons, Brian Whitney, and Navid Kalatizadeh, who will be called "the Simmons Plaintiffs"—moved to intervene for the limited purpose of opposing Argentieri's intervention motion. Doc. 152. The Simmons Plaintiffs are the named plaintiffs in Simmons v. Ambit Energy Holdings, LLC , Index No. 503285/2015, 2017 WL 1196941 (N.Y. Sup. Ct., Kings Cnty., filed Mar. 23, 2015), a putative class action against Ambit entities in New York state court. Doc. 156–1 (reproducing the operative complaint in Simmons ). They maintain that allowing Argentieri, a putative class member in Simmons , to become a plaintiff-intervenor here could impair their suit.

For the following reasons, Ambit's summary judgment motion is granted, its motion to strike is denied, Argentieri's motion to intervene is denied, and the Simmons Plaintiffs' motion to intervene is denied as moot.

Background

The following facts are set forth as favorably to Kostovetsky as the record and Local Rule 56.1 permit. See Hanners v. Trent , 674 F.3d 683, 691 (7th Cir. 2012). On summary judgment, the court must assume the truth of those facts, but does not vouch for them. See Arroyo v. Volvo Grp. N. Am., LLC , 805 F.3d 278, 281 (7th Cir. 2015).

Certain Illinois natural gas consumers, including those served by Nicor Gas, have the option of contracting for gas service with an alternative gas supplier rather than their local utility. Doc. 134 at ¶ 1; see also Natural Gas Choice , Illinois Commerce Commission, https://www.icc.illinois.gov/ags/consumereducation.aspx (last visited Mar. 8, 2017). Ambit Illinois is one such alternative supplier. Doc. 103 at ¶ 1. Like other Ambit entities, Ambit Illinois relies on salespeople it calls "Independent Consultants" to find and enroll new customers. Id. at ¶¶ 2–3. In trainings for its consultants and on its website, Ambit Illinois emphasizes potential consumer savings and its "competitive" low rates. Doc. 134 at ¶¶ 3–12.

Kostovetsky was a Nicor customer until late June 2013, when an Ambit consultant persuaded him to switch to Ambit Illinois. Id. at ¶¶ 28–30. As Kostovetsky understood the sales pitch, the consultant promised that, "no matter what," Ambit Illinois would charge him a lower rate than Nicor and he would save money by switching. Doc. 100–16 at 10–11; Doc. 134 at ¶ 30. (Defendants lodge a hearsay objection to Kostovetsky's testimony about what the consultant told him. Doc. 132 at 5. The objection is overruled because the consultant's statements while pitching Ambit Illinois's services are admissible under Federal Rule of Evidence 801(d)(2)(C) and/or (D).) Specifically, Kostovetsky thought that, as an Ambit customer, he would be entitled to at least a one percent discount from Nicor's rates. Doc. 103 at ¶ 18.

Upon agreeing to enroll with Ambit Illinois, Kostovetsky gave the consultant his Nicor bill, which was the only information the consultant requested to sign him up. Doc. 100–16 at 13; Doc. 134 at ¶¶ 31–32. On June 28, 2013, someone other than Kostovetsky—presumably the consultant—used Ambit Illinois's website to enroll him. Doc. 69–1 at 4 ¶ 15; Doc. 100–16 at 12; Doc. 103 at ¶ 4; Doc. 134 at ¶ 31. Shortly thereafter, someone other than Kostovetsky completed his enrollment on a phone call that Ambit requires to verify new enrollments. Doc. 134 at ¶ 33.

Signing up via Ambit Illinois's website requires the customer's name, address, telephone number, and account number with his incumbent utility. Doc. 69–1 at 2 ¶ 5; Doc. 103 at ¶ 5. New customers enrolling through the website must also check a box acknowledging and accepting Ambit Illinois's terms of service, to which they are given a hyperlink. Doc. 69–1 at 2 ¶ 6; Doc. 103 at ¶ 6. Whoever signed up Kostovetsky must have checked the box. Doc. 69–1 at 2 ¶ 6; Doc. 103 at ¶ 6. That person also provided Kostovetsky's mailing address, which was accurate, and an e-mail address, "blooshi@aol.com," which was inaccurate. Doc. 100–16 at 19–21; Doc. 110 at ¶¶ 7, 22; Doc. 134 at ¶ 34.

On June 28, Ambit Illinois sent a welcome email, including a hyperlink to its terms of service, to the inaccurate email address. Doc. 69–1 at 2 ¶ 7; Id. at 8; Doc. 110 at ¶ 7. On June 30, Ambit Illinois sent a welcome letter to the accurate mailing address associated with Kostovetsky's account, enclosing a three-page document setting forth the terms of service. Doc. 69–1 at 3 ¶ 8; id. at 10–13; Doc. 103 at ¶ 8. Ambit has adduced evidence that Ambit Illinois mailed the June 30 letter containing the terms of service to Kostovetsky's mailing address and that the letter was not returned undelivered. Doc. 103 at ¶¶ 20–23. Although Kostovetsky has acknowledged that the address Ambit Illinois has on file for him is accurate, Doc. 69–2 at 2–3 ¶¶ 6–8; id. at 6; Doc. 69–3 at 2 ¶ 6; id. at 6; Doc. 100–16 at 21; Doc. 103 at ¶ 22, he testified at his deposition that he could not recall whether he received the June 30 letter, Doc. 100–16 at 21–22.

The parties disagree whether, on this record, there is a genuine factual dispute whether Kostovetsky received the June 30 letter. There is not. "[E]vidence of proper mailing raises a rebuttable presumption of delivery." Laouini v. CLM Freight Lines, Inc. , 586 F.3d 473, 476 (7th Cir. 2009) ; see also Vincent v. City Colls. of Chi. , 485 F.3d 919, 922 (7th Cir. 2007) ("Evidence of mailing is evidence of delivery."). If Kostovetsky had denied receiving the letter, his sworn denial would rebut the presumption for summary judgment purposes and create a factual dispute that the jury would need to resolve. See Joshi v. Ashcroft , 389 F.3d 732, 735 (7th Cir. 2004) ; In re Longardner & Assocs., Inc. , 855 F.2d 455, 459 (7th Cir. 1988). But that is not our situation. Kostovetsky's deposition testimony makes clear that he simply cannot recall whether he received the letter:

Q. Did you receive this letter [with the terms of service] in the mail from Ambit?

A. I don't remember.

Q. You just don't recall one way or the other?

A. I don't remember receiving this letter.

Q. I want to make sure I understand your testimony, Mr. Kostovetsky, and I'll let you know that Ambit's records reflect that the letter was mailed to you.

So my question is are you denying under oath that you received the letter?

A. I have no recollection of this letter.

Q. You have no recollection one way or the other?

A. One way or the other.

Doc. 100–16 at 21–22.

Unlike an outright denial, Kostovetsky's lack of recollection cannot rebut the presumption that he received the letter, and so there is no genuine factual dispute. See Boomer v. AT&T Corp. , 309 F.3d 404, 415 n.5 (7th Cir. 2002) (explaining that the plaintiff did not "present any conflicting evidence" regarding his receipt of a properly addressed mailing, as he "[did] not contend that he did not receive the mailing—just that he does not remember receiving it"); Tinder v. Pinkerton Sec. , 305 F.3d 728, 735–36 (7th Cir. 2002) (holding that the non-movant's assertion "only that she does not remember receiving or seeing" a brochure containing the terms of her employment, where other evidence showed that the brochure was "definitely sent and presumably received," did not create a genuine factual issue over whether she received it); Walton v. Johnson & Johnson Servs., Inc. , 347 F.3d 1272, 1287 n.13 (11th Cir. 2003) ("The fact that neither [the non-movant] nor another employee remember receiving the policy (as opposed to being able to definitely testify that they never received it), is not particularly probative of whether [the non-movant] did in fact receive a copy of the policy."); Bixler v. Cent. Pa. Teamsters Health & Welfare Fund , 12 F.3d 1292, 1301 (3d Cir. 1993) (holding...