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Gorss Motels, Inc. v. Otis Elevator Co.

United States District Court, D. Connecticut

September 30, 2019

GORSS MOTELS, INC., Plaintiff,
v.
OTIS ELEVATOR COMPANY, Defendant.

          RULING AND ORDER ON MOTION FOR SUMMARY JUDGMENT

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE

         Gorss Motels, Inc., (“Plaintiff” or “Gorss Motels”) has sued the Otis Elevator Company (“Defendant”) for allegedly sending unsolicited facsimiles in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 (“TCPA” or “Act”).

         This case is one of several putative class actions lodged against franchisees of Wyndham Hotel Group, but in this case, class certification has already been denied. See Order and Memorandum of Decision on the Plaintiff’s Motion for Class Certification, ECF No. 105 (Apr. 4, 2019) (Dooley, J.).

         The Otis Elevator Company also has moved for summary judgment on all of Gorss Motels’s claims. Motion for Summary Judgment, ECF No. 64 (June 1, 2018) (“Def.’s Mot.”); Memorandum of Law in Support of Def.’s Mot., ECF No. 65 (June 1, 2018) (“Def.’s Mem.”); Local Rule 56(a)(1) Statement of Undisputed Material Facts, ECF No. 68 (June 1, 2018) (“Def.’s SMF”).

         Gorss Motels has opposed the Otis Elevator Company’s motion for summary judgment.

         Plaintiff’s Memorandum in Opposition to Def.’s Mot., ECF No. 77 (June 22, 2018) (“Pl.’s Opp.”); Local Rule 56(a)(2) Statement of Facts, ECF No. 78 (June 22, 2018) (“Pl.’s SMF”).

         For the following reasons, the Otis Elevator Company’s motion for summary judgment is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations[1]

         This case arises out of a single facsimile advertisement sent to Gorss Motels on August 13, 2015. Compl. ¶ 11. The Wyndham Hotel Group (“Wyndham”), a hotel franchise company that franchises several brands, including Super 8®, and related lodging subsidiaries including Super 8 Worldwide, Inc. Def.’s SMF ¶ 3.

         On October 3, 1988, Gorss Motels first entered into a Franchise Agreement with Super 8 Motels, Inc. to operate a Super 8® lodge for an initial term of twenty years. Id. ¶ 27.

         In February of 2014, the Otis Elevator Company entered into a contract-the “Strategic Sourcing Agreement”-with Wyndham Worldwide Sourcing Solutions Inc. (“WSSI”), a wholly owned subsidiary of Wyndham Worldwide Corporation and affiliate of Wyndham. Id. ¶¶ 4-7.

         Through this Agreement, the Otis Elevator Company became an “Approved Supplier” of elevator services for Wyndham franchisees. Id. WSSI’s “Approved Supplier” program, also known as its “Strategic Sourcing” program, supports the purchasing efforts of Wyndham franchisees by negotiating prices, volume discounts, and commissions for various products and services with designated “approved suppliers.” Id. ¶ 8. Under the Strategic Sourcing Agreement, once the Otis Elevator Company became an “Approved Supplier, ” WSSI would provide information regarding Otis Elevator Company’s goods and services to Wyndham franchisees, and WSSI would then receive a percentage of revenue for any new franchisee contracting with the Otis Elevator Company that was not already an Otis Elevator Company customer. Id. ¶ 11.

         On July 22, 2014, upon the expiration of its 1988 Franchise Agreement, Gorss Motels applied to Wyndham to continue as a franchisee. Id. ¶ 29. That application included Gorss Motels’s fax number. Id.

         On September 10, 2014, Gorss Motels entered into another Franchise Agreement for an additional twenty-year term. Id. ¶ 30. The 2014 Franchise Agreement addressed the Approved Supplier program, id. ¶ 32, and informed Gorss Motels that “Gorss could, and in some instances was required to, purchase furniture, fixtures, equipment, and other supplies through WSSI’s Approved Supplier Program.” Id. ¶ 34.

         Gorss Motels concedes it affirmatively provided its contact information, including the (860) 632-8889 facsimile number, to Wyndham and its affiliates many times during the years it was a franchisee. Id. ¶ 35. Additionally, Gorss Motels’s fax number was published in Super 8® directories, made available on the Internet for general use, and used in various advertisements and postings over the years. Id. ¶¶ 37-39.

         Section 3.1 of the 2014 Franchise Agreement required Gorss Motels to renovate its property in accordance with the Property Improvement Plan Report. Id. ¶ 50; see also Declaration of Suzanne Fenimore Ex. G: Super 8 Worldwide, Inc. Franchise Agreement, ECF No. 73-10 at 8, 12 (June 1, 2018) (“You must renovate and improve the Facility in accordance with any Punch List attached to this Agreement, any Approved Plans and System Standards. . . . The PIP identifies specific items inspected at the Facility and were not in compliance with brand standards and need to be corrected.”). Before executing the 2014 Franchise Agreement, on August 26, 2014, Gorss Motels signed the Property Improvement Plan Report, thus acknowledging and agreeing that Wyndham-approved vendors would receive his contact information to reach out and offer their products and services, which were required to complete the Property Improvement Plan Report. Id. ¶ 51; see also Fenimore Decl. Ex. G, ECF No. 73-10 at 12 (“By signing this PIP, I acknowledge and agree that select pieces of this PIP may be provided to our approved vendors . . . Only information necessary for the vendor to offer their products and services will be provided, including contact information, property of address, number of rooms, brand converting to, and a list of items related to necessary or required products and services.”). Gorss Motels’s Property Improvement Plan Report identified the elevators at the Gorss Motels property as not meeting brand quality standards. Id. ¶ 52. The Property Improvement Plan Report provided Gorss Motels one year to refurbish the property’s elevator from the Otis Elevator Company. Id. ¶ 53.

         In July 2015, WSSI reached out to Otis Elevator Company with a plan to disseminate information about Otis Elevator Company’s products to the Wyndham franchisees. Id. ¶ 13. The Otis Elevator Company believed it would be a “Fact Blast” sent to franchisees by e-mail; WSSI intended for the “Fax Blast” to be issued by facsimile. Id. ¶¶ 13-17; compare with Pl.’s SMF ¶¶ 13-17.

         On July 27, 2015, at WSSI’s request, Roger Nayle, an Otis Elevator Company employee, provided a one-page, color flyer or “fact sheet” describing the Otis Elevator Company’s services. Def.’s SMF ¶ 14. After receiving Mr. Nayle’s final version of the flyer, and without further communication with Otis Elevator Company, WSSI added “fax disclaimer” and “WHG disclaimer”[2] language that it had been using for years to the bottom of the flyer, and affixed a prominent Wyndham Hotel Group logo in the bottom right corner. Id. ¶¶ 18-19. There is no record of WSSI invoicing Otis Elevator Company for sending the facsimile (the “Fax”), nor is there a record of any payment received by WSSI from Otis Elevator Company regarding the Fax. Id. ¶ 20.

         On or about August 5, 2015, WSSI asked a third-party vendor, Western Printing, to transmit the flyer by fax to certain specified Wyndham franchisees. Id. ¶ 21. Western Printing, in turn, subcontracted the actual transmission of the Fax to one of its own vendors, WestFax. Id. ¶ 24. The Otis Elevator Company had no relationship or communication with either Western Printing or WestFax. Id. ¶¶ 23, 25.

         On August 13, 2015, after receiving an order from Wyndham’s vendor, Western Printing, WestFax had the Fax sent from the “973 Source Number” to Gorss Motels’s fax number of (860) 632-8889, id. ¶ 26, which is a fax number that Gorss Motels had provided to Wyndham many times over the years, both before and after receipt of the Fax. Id. ¶ 35. The Fax was sent within the Property Improvement Plan Report’s one-year directive for Gorss Motels to refurbish its elevator from the Otis Elevator Company, consistent with Wyndham’s standards. See Id . ¶ 53.

         After receiving the Fax, Gorss Motels never called, faxed, e-mailed, or otherwise contacted anyone to request that facsimiles stop, and never informed WSSI that Gorss Motels did not want to receive communications related to Approved Suppliers by fax. Id. ¶¶ 40-48.

         Steven Gorss, the owner of Gorss Motels, considered all advertising facsimiles to be illegal “junk faxes.” Id. ¶ 55. “Gorss never reviewed any of the opt-out languages on facsimiles it received, and never called, faxed, emailed, or otherwise contacted anyone to request that facsimiles stop.” Id. ¶ 60. “Gorss never opted out of receiving faxes sent as part of the Approved Supplier program, and never informed WSSI that Gorss objected to or did not want to receive fax communications relating to Approved Suppliers.” Id. ¶ 64.

         On August 4, 2016, Gorss Motels sold its Super 8® franchise. Id. ¶ 65. During the period in which it was a Wyndham property, Gorss Motels received only one fax relating to the Otis Elevator Company, the Fax. Id. ¶ 73.

         Gorss Motels alleges that the Otis Elevator Company profits and benefits from the sale of goods advertised in the unsolicited fax. Compl. ¶ 12. Furthermore, Gorss Motels alleges that the Fax lacks required opt-out language, id. ¶ 14, and that Gorss Motels has lost paper, toner, and time, resources that would otherwise be used in the course of their business activities. id. ¶ 34.

         B. Procedural History

         On October 27, 2016, Gorss Motels filed a putative class action complaint against the Otis Elevator Company and several unnamed defendants, challenging their alleged practice of sending unsolicited facsimiles in violation of the Telephone Consumer Protection Act of 1991 (or “TCPA”). Compl ¶¶ 1-2.

         On the same day, Gorss Motels moved to certify the class, or in the alternative, stay proceedings. Motion for Class Certification and for Temporary Stay of Further Proceedings on that Motion, ECF No. 3 (Oct. 27, 2016).

         On January 25, 2017, the Otis Elevator Company filed a motion to stay the litigation, pending a decision by the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) on the viability of the FCC’s “solicited fax” rule. Motion to Stay Litigation, ECF No. 24 (Jan. 25, 2017).

         On February 8, 2017, Gorss Motels objected to the Otis Elevator Company’s motion, Memorandum in Opposition to Defendant’s Motion, ECF No. 31 (Feb. 8, 2017), and on February 22, 2017, the Otis Elevator Company filed a memorandum in support of its motion. Memorandum in Support of Motion to Stay, ECF No. 32 (Feb. 22, 2017).

         On April 5, 2017, this Court found the motion to stay as moot, because the D.C. Circuit had issued its decision, see Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017), and ordered the parties to submit responsive pleadings and a Rule 26(f) report within thirty days. Order, ECF No. 35 (Apr. 5, 2017).

         On May 5, 2017, the Otis Elevator Company timely filed its Answer with affirmative defenses. Answer, ECF No. 36 (May 5, 2017).

         On July 6, 2017, this Court issued an order denying Gorss Motels’s initial motion for class certification without prejudice, or in the alternative, a stay, and instructed Gorss Motels to file the motions, if necessary, at a later date under the scheduling order issued on May 17, 2017. See Order, ECF No. 43 (July 6, 2017).

         On June 1, 2018, the Otis Elevator Company moved for summary judgment. Def.’s Mot.; Def.’s Mem.

         On the same date, Gorss Motels filed another motion for class certification, Motion to Certify ...


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