Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., Case No. 12–80178–CIV.

981 F.Supp.2d 1239

PALM BEACH GOLF CENTER–BOCA, INC., Plaintiff,

v.John G. SARRIS, D.D.S., P.A., Defendant.

Case No. 12–80178–CIV.

United States District Court, S.D. Florida.

Oct. 22, 2013.

Brian J. Wanca, Ryan Michael Kelly, Anderson + Wanca, Rolling Meadows, IL, Daniel J. Cohen, Phillip A. Bock, Bock & Hatch, LLC, Chicago, IL, Leslie Mitchell Kroeger, Leopold Law, P.A., Palm Beach Gardens, FL, for Plaintiff.

Molly A. Arranz, Eric L. Samore, SmithAmundsen, LLC, Chicago, IL, William Stuart Reese, Kevin David Franz, Lane Reese Summers Ennis & Perdomo, P.A., Coral Gables, FL, for Defendant.

ORDER

KATHLEEN M. WILLIAMS, District Judge.

THIS MATTER is before the Court upon Defendant's Motion for Summary Judgment (DE 59–61), to which Plaintiff filed a Response (DE 75–76, 78) and Defendant filed a Reply (DE 82). The Court heard oral argument on the Motion on August 2, 2013 (DE 89, 95). In connection with this briefing, Defendant also filed a Motion to Strike (DE 80), to which Plaintiff filed a Response (DE 88). The Court addresses all related filings in this Order.

I. BACKGROUND

On December 13, 2005, a one-page fax advertising dental services may have been sent to a golf equipment store. The dentist never saw or approved the advertisement and the golf store owner does not remember ever seeing or receiving it. This four-year litigation spanning both state and federal courts ensued.

A. Defendant and Plaintiff

Defendant John G. Sarris, D.D.S., P.A. is a Florida dental practice owned by Dr. John G. Sarris.¹ In 2003, Sarris engaged an independent contractor named Mike Roberts to provide marketing services to the dental practice, giving Roberts “free rein” to legally advertise the dental practice. (DE 60–4, Roberts Aff. ¶ 8.) In 2005, Roberts was solicited by Business to Business Solutions (“B2B”), the d/b/a of a woman from New York named Carol Abraham. B2B was a middle person for a Romanian company known as Macaw, which provided fax advertisement services; B2B sold Macaw's services in the United States and made fax phone lines available to Macaw.²

B2B offered to send up to 10,000 fax advertisements for Roberts in exchange for $420. Roberts communicated with individuals representing B2B, although never Abraham herself, to discuss a potential fax advertising campaign. He specified that faxes should be sent to fax numbers only in specific zip codes near the dental practice and not to the fax numbers of other dental practices. (Roberts Aff. ¶¶ 12–13.) The last known communication between Roberts and B2B about proposed faxing occurred on December 1, 2005, when Roberts sent B2B a marked-up draft of a fax advertisement with the handwrittennote, “Please refax me changes and I will sign off.” (Roberts Aff. ¶ 14.) Roberts does not recall receiving a reply fax from B2B or signing off on any changes. (Roberts Aff. ¶¶ 15–17.) But on December 7, 2005, B2B received a check for $420 from Sarris Management Corporation, a separate company that pays bills for the dental practice and is run by Sarris's wife. (DE 60–6, Abraham Dep. Exs. at 32.) Roberts never informed Sarris of his communications with B2B or the proposed fax advertisement campaign.³ (Roberts Aff. ¶ 7; DE 60–3, Sarris Dep. at 19.)

Sarris became aware of the fax advertisement campaign by January 20, 2006, when his attorney received a letter from Paul Price, attorney for the Presbytery of Tropical Florida, stating that the Presbytery had received an unsolicited fax sent on behalf of Sarris's dental practice, which it believed violated the Federal Telephone Consumer Protection Act (“TCPA”). (Sarris Dep. at 22; DE 60–6, Abraham Dep. Exs. at 29–31.) Upon receiving a copy of this letter, Roberts faxed it to B2B and asked that B2B's law firm contact Sarris's attorney as soon as possible. (Abraham Dep. Exs. at 27.)

Plaintiff Palm Beach Golf Center–Boca, Inc. (“Palm Beach Golf”) is a golf equipment store owned and operated by Larry Sugarman. In 2005, Palm Beach Golf had a fax machine on a dedicated phone line that printed faxes as they came in. (DE 21–5 & 60–9, Sugarman Dep. at 15, 20, 45.) When Sugarman noticed that the store was receiving a lot of unwanted faxes, he told his employees to put those faxes in a box next to the fax machine. (Sugarman Dep. at 20, 24.) At some point, he took an additional step: after receiving marketing materials from the Illinois law firm of Anderson & Wanca,⁴ Sugarman contacted the firm and engaged Ryan Kelly, his attorney in the present lawsuit, who he perceived to be “a specialist in stopping faxes.” (Sugarman Dep. at 26, 53–54.) Sugarman then gathered the unwanted faxes he had collected and sent them to Kelly. (Sugarman Dep. at 55.) Notably, Sugarman does not remember ever seeing a fax from Sarris's dental practice, does not have any knowledge that Palm Beach Golf ever received a fax sent on behalf of Sarris's dental practice, and cannot identify any Palm Beach Golf records or employees that could establish receipt of such a fax. (Sugarman Dep. at 19–22, 28, 64.)

B. Prior Litigation

The parties do not dispute that this case has its genesis in previous class action lawsuits in other Districts in which B2B was involved in selling fax advertisement services to U.S. customers.⁵ Class counsel in four earlier TCPA lawsuits ⁶ sought fax transmission information from Abraham to try to define an identifiable class of fax recipients in those lawsuits, and Abraham eventually produced spreadsheets that she believed contained the information sought. In a deposition on December 14, 2008, Abraham, who was unrepresented by counsel, testified that her son Joel, who lived with her, had found back-up disks in his bedroom and a hard drive at their house that seemed to contain fax transmission information. Abraham also testified that B2B had arranged for faxes to be sent on behalf of hundreds of other customers and not just the defendants in the four cases for which she was being deposed.

Although class counsel had already received the fax transmission information from Abraham related to the four lawsuits they were engaged in, after the deposition, class counsel promised Abraham in writing that they would enter a protective order preventing them from disclosing any additional information on the back-up disks and hard drive to third parties if she produced them. Class counsel made the same representation in a hearing before a federal judge in one of the four lawsuits. However, on January 8, 2009, class counsel deposed Abraham's son Joel, and, at the direction of his mother, he appeared with the back-up disks and hard drive containing the additional fax transmission information and gave it to class counsel.⁷ Because class counsel subpoenaed Joel, not his mother, they did not find it “necessary” to rely on the entry of the promised protective order to obtain the information they were after. See Reliable Money Order, Inc. v. McKnight Sales Co., 704 F.3d 489, 491–92 (7th Cir.2013) (summarizing events); CE Design Ltd. v. CY's Crabhouse N., Inc., No. 07 C 5456, 2010 WL 3327876 (N.D.Ill. Aug. 23, 2010) (summarizing events).

By January 13, 2009, Plaintiffs' expert in those cases and the present case, Robert Bigerstaff, received the back-up disks to analyze and found what he determined to be fax transmission information for thousands of alleged fax recipients. Upon receipt of this information, Plaintiff's counsel in this case sent solicitation letters to the alleged fax recipients identified by Bigerstaff.⁸ Plaintiff in the present case disclosed the solicitation letter he received from Kelly, which stated:

My law firm litigates class action lawsuits against companies which send junk faxes. It is unlawful to send advertising faxes without obtaining the recipients' prior express permission or invitation. We try to recover compensation for the recipients of junk faxes and also attempt to stop future junk faxes.

During our investigation, we have determined that you are likely to be a member of the class. You might not remember receiving junk faxes, but if the lawsuit is successful, you would receive compensation (up to $1,500) for each junk fax sent.

We would like to discuss this issue with you. Please call me at [telephone number]. Very truly yours, Anderson & Wanca, Ryan M. Kelly

(DE 28–16, Pl.'s Resps. to Defs.' Request for Prod. at 10; see also DE 28–13, Solicitation Letters.) The words “Advertising Material” appear at the bottom of the letter.⁹

C. The Present Litigation

On June 9, 2009, Palm Beach Golf entered into a retainer agreement with Anderson & Wanca and another Illinois law firm, Bock & Hatch LLC, which included a contingency clause—an agreement that attorneys' fees are owed only upon a successful outcome in the lawsuit—that provided for a fee equal to one-third of any benefit conferred upon the class. (DE 28–21, Retainer Agreement.) On July 9, 2009, the law firms filed three TCPA class action lawsuits on behalf of Palm Beach Golf in Florida state court, including the present lawsuit.¹⁰

In this lawsuit, Palm Beach Golf raises two claims against the Sarris dental practice: (1) violations of the TCPA, 47 U.S.C. § 227, and (2) state law conversion. Although Palm Beach Golf is the Plaintiff and proposed Class Representative, Sugarman testified that he did not review the complaint before it was filed and was not aware it was a class action lawsuit. (Sugarman Dep. at 26, 42.) The Second Amended Complaint (“SAC” or “complaint”), the operative pleading, was filed in Florida state court on September 7, 2010. Following the Supreme Court opinion in Mims v. Arrow Financial Services, LLC, ––– U.S. ––––, 132 S.Ct. 740, 181 L.Ed.2d 881 (2012), which held that federal courts have federal question jurisdiction over private suits arising under the TCPA, Defendant removed the action to this Court on February 16, 2012. (DE 1.)

Plaintiff's claims are predicated solely upon the Bigerstaff report. ¹¹ The report states that data contained on the back-up disk (obtained from...