Bristow v. American National Insurance Company

Filing 24

ORDER Denying Defendant's 17 Motion to Dismiss. Defendant shall file an Answer to the Second Amended Complaint by January 18, 2021. Signed by District Judge George Caram Steeh. (BSau)

Case 2:20-cv-10752-GCS-APP ECF No. 24, PageID.344 Filed 01/04/21 Page 1 of 11

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KYLE JAMES BRISTOW,
Plaintiff,

Case No. 20-10752

vs.

HON. GEORGE CARAM STEEH

AMERICAN NATIONAL
INSURANCE COMPANY,
Defendant.
____________________________/
ORDER DENYING DEFENDANT’S MOTION TO DISMISS [ECF No. 17]
Plaintiff, Kyle James Bristow, alleges that defendant, American
National Insurance Company (“American National”), violated the Telephone
Consumer Protection Act (“TCPA”) 47 U.S.C. § 227, and the accompanying
regulations prescribed by the Federal Communications Commission, by
calling his cellphone number eleven times and leaving five voicemails for
commercial purposes. Plaintiff’s Second Amended Complaint asserts one
count for violations of the TCPA. Plaintiff alleges that defendant violated
two provisions of the TCPA: 47 U.S.C. §227(b)(1)(A)(iii) when it called
plaintiff’s cellphone without prior express written consent; and 47 U.S.C.
§227(c)(5) for making unsolicited telephone calls of a commercial nature to
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plaintiff’s cellphone despite the number being registered with the National
Do Not Call Registry. The matter is before the court on defendant’s motion
to dismiss pursuant to Fed. R. Civ P. 12(b)(6) [ECF No. 17]. The matter is
fully briefed and the Court does not believe it will be further aided by oral
argument. For the reasons stated below, defendant’s motion to dismiss is
denied.
STATEMENT OF FACTS
Plaintiff is a Michigan resident who has a cellular telephone, which he
uses for personal calls, ending in -8395. Defendant is a for-profit
corporation that specializes in insurance products and services and is
headquartered in Galveston, Texas. Beginning on February 3, 2020,
plaintiff began receiving telephone solicitation calls from defendant to his
cellular telephone. Plaintiff’s cellphone number has been registered on the
National Do Not Call Registry since November 2005. From February 3,
2020 to February 6, 2020, plaintiff received eleven calls and five voicemails
from defendant. Plaintiff did not answer any of these calls. The voicemails
claim to be in reference to a life insurance quote.
On February 8, 2020, plaintiff placed a call to defendant. On
February 10, 2020, Derrick Jefferson, an employee of defendant, returned
plaintiff’s call. During this call, plaintiff expressed to Jefferson that he did
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not wish to receive the calls at issue. Jefferson responded, “I guess what
happens is once you put your information online, we don’t actually call you,
the system calls.” Upon learning that plaintiff did not wish to receive calls,
defendant ceased placing any further calls to plaintiff’s cellular phone.
Musselman Decl. at ¶¶ 5-6. 1
Defendant asserts that it never called plaintiff’s phone number at
random nor used a machine that dials random or sequential numbers.
Musselman Decl. at ¶ 4. Rather, defendant claims that it began calling
plaintiff’s phone number on February 3, 2020 in response to an application
or inquiry into its products or services. Defendant contends that on
February 3, 2020, a prospective customer (“Customer”) visited defendant’s
website and filled out a request for an insurance quote. In the “contact”
field of that online insurance request form, the Customer entered plaintiff’s
phone number ending in -8395. The Customer accepted defendant’s terms
and conditions, including that defendant would call the Customer to provide
further information as requested in the insurance quote form. Musselman
Decl. at ¶ 2.

Michael Musselman is the Assistant Vice President – Marketing & Analytics
Independent Marketing Group of American National.
1

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Upon learning that plaintiff did not ask to be called by American
National, defendant investigated. Musselman Decl. at ¶ 8. Defendant
discovered that the Customer appears to have a phone number that is
identical to plaintiff’s except the last digit is one number different. Id.
Defendant claims that, before its February 10, 2020 call with plaintiff, it had
no reason to know that the phone number the Customer entered on
American National’s website on February 3, 2020 was plaintiff’s phone
number. Musselman Decl. at ¶¶ 10-11.
LEGAL STANDARD
Rule 12(b)(6) allows the Court to make an assessment as to whether
the plaintiff has stated a claim upon which relief may be granted. Under the
Supreme Court’s articulation of the Rule 12(b)(6) standard in Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 554-56 (2007), the Court must construe
the complaint in favor of the plaintiff, accept the allegations of the complaint
as true, and determine whether plaintiff=s factual allegations present
plausible claims. A’[N]aked assertion[s]= devoid of >further factual
enhancement=@ are insufficient to Astate a claim to relief that is plausible on
its face@. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,
550 U.S. at 557, 570). To survive a Rule 12(b)(6) motion to dismiss,
plaintiff=s pleading for relief must provide Amore than labels and
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conclusions, and a formulaic recitation of the elements of a cause of action
will not do.@ D=Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014)
(quoting Twombly, 550 U.S. at 555) (other citations omitted). Even though
the complaint need not contain Adetailed@ factual allegations, its Afactual
allegations must be enough to raise a right to relief above the speculative
level on the assumption that all the allegations in the complaint are true.@
New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1051
(6th Cir. 2011) (citing Twombly, 550 U.S. at 555).
ANALYSIS
In its motion to dismiss, defendant argues several reasons that
plaintiff’s Second Amended Complaint fails to state a claim under 47 U.S.C.
§ 227(b)(1)(A). First, defendant argues that plaintiff has not plausibly
alleged that an ATDS was used to call his phone number. Next, defendant
contends it can show that it had express prior consent to call plaintiff’s
phone number, or at least permission by someone with apparent authority,
and immediately ceased calling plaintiff once consent was revoked. Lastly,
defendant argues that plaintiff’s 47 U.S.C. §227(c)(5) claim that defendant
made unsolicited telephone calls of a commercial nature to plaintiff’s
cellphone despite the number being registered with the National Do Not
Call Registry fails due to the established business relationship exception.
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I.

Use of an ATDS
The TCPA prohibits the use of an automatic telephone dialing system

(“ATDS”) to call someone who has not given prior consent to be called.
The TCPA defines an ATDS as “equipment which has the capacity (a) to
store or produce telephone numbers to be called, using a random or
sequential number generator; and (B) to dial such numbers.” 47 U.S.C.
§227(a)(1).
Plaintiff expressly alleges that the calls defendant made to his
telephone were initiated with an ATDS (ECF No. 14; Second Amended
Complaint ¶¶ 1, 11, 14, 37). In support of this assertion, plaintiff cites to a
conversation he had with a representative of defendant, in which the
representative explained that, “I guess what happens is once you put your
information online, we don’t actually call you, the system calls.” (ECF No.
14; Second Amended Complaint ¶ 32).
There is a circuit split regarding what constitutes an ATDS. The
Seventh and Eleventh Circuits take a narrow view of the definition of an
ATDS, giving credence to a strict grammatical reading of the statute and
concluding that an ATDS must include a random or sequential number
generation. See Gadelhak v. AT&T Servs., Inc., 950 F.3d 458 (7th Cir.
2020); Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301 (11th Cir.
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2020). The Second and Ninth Circuits have applied a broader definition,
finding that systems, generally referred to as predictive dialers, that call
from a stored list of number are sufficiently automatic to be considered an
ATDS. See Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052 (9th
Cir. 2018); Duran v. La Boom Disco, Inc., 955 F.3d 279, (2d Cir. 2020).
On July 29, 2020, the Sixth Circuit issued an opinion expressing its
agreement with the Second and Ninth Circuits, holding that that the TCPA’s
statutory definition of an ATDS includes telephone equipment that can
automatically dial phone numbers stored in a list. Allan v Pa. Higher Educ.
Assistance Agency, 968 F.3d 567, 580 (6th Cir. 2020). The Sixth Circuit
did not read the statute to require that the stored numbers be randomly or
sequentially generated.
The Supreme Court is poised to resolve this circuit split in the case of
Duguid v. Facebook, Inc. The issue before the Supreme Court is whether
the definition of an ATDS in the TCPA encompasses any device that can
store and automatically dial telephone numbers, even if the device does not
use a random or sequential number generator. Case No. 19-511 (cert.
granted July 9, 2020, oral argument held December 8, 2020). Until that
time, this court is bound by the precedent set forth by the Sixth Circuit in
Allan.
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By pleading that the dialing system used by defendant stored his
telephone number and repeatedly called the phone number, as supported
by the transcript of the phone call between plaintiff and defendant’s agent,
plaintiff has stated a plausible cause of action under § 227(b)(1)(A)(iii) and
Allan, 968 F.3d at 580. Until discovery is conducted on the type of system
defendant used to make the calls to plaintiff’s telephone number, plaintiff
would not have the ability to know the technical specifications of the system
employed. With respect to the key element of ATDS use, the plaintiff
alleges defendant’s agent said that “the system calls you once you put in
your number.” Viewing the complaint in the light most favorable to plaintiff,
the court finds that plaintiff has plausibly demonstrated that the equipment
defendant used to make the calls to his telephone was an ATDS.
II.

Express Prior Consent
Next, defendant contends that it obtained plaintiff’s phone number as

part of a direct application for information, voluntarily and consensually.
Therefore, defendant argues, it had express consent from plaintiff to make
calls to his telephone number. Furthermore, because defendant stopped
calling plaintiff’s phone as soon as plaintiff revoked his consent, defendant
maintains that he did not violate the TCPA.

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Defendant relies on Allan to support this argument. In Allan, the
plaintiffs submitted a written request for forbearance on a student loan
serviced by the defendant. In so doing, the court acknowledged that
plaintiffs consented to receiving calls from defendant to their cell phones.
968 F.3d at 569. However, this consent was subsequently revoked by the
plaintiffs, and plaintiffs’ allegations that defendant violated the TCPA were
based only on the subsequent unconsented-to calls. Id. at 570.
Defendant argues that because each of its calls to plaintiff’s
telephone was made after receiving consent, and that it ceased making
calls after plaintiff revoked his consent, it did not violate the TCPA. The
problem with defendant’s argument is that, at least at this stage of the
litigation, there is no evidence that plaintiff gave his consent to receive calls
from defendant. Defendant’s own investigation revealed that Customer,
not plaintiff, gave consent to receive calls. At this point, there is no
evidence that Customer was authorized by plaintiff to provide consent to
receive calls from defendant on his behalf.
III.

Apparent authority
Defendant alternatively asserts that the Customer had apparent

authority to authorize defendant to call plaintiff’s phone number. Defendant
asserts that apparent authority was established because Customer asked
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defendant to call plaintiff’s number when it filled out an application inquiring
into defendant’s products. “Apparent authority must be traceable to the
principal and cannot be established by the acts and conduct of the agent.”
Meretta v. Peach, 195 Mich. App. 695, 699 (1992) (citation omitted). By
focusing on the acts of the Customer, defendant cannot establish apparent
authority.
IV.

Established Business Relationship
Plaintiff claims that defendant also violated Section 227(c)(5) of the

TCPA, which generally prohibits companies from making more than one
telephone call within any twelve-month period to an individual who
subscribes to the National Do Not Call registry. There is an exception to
this prohibition when the parties have an established business relationship.
Defendant argues that it had an established business relationship with
plaintiff based on the online inquiry submitted by the Customer.
The purpose of the established business relationship is that the FCC
does not desire to interfere with ongoing business relationships. See 7
F.C.C.R. 8752, 8779 n.87 (Oct. 1992). However, plaintiff has alleged that
he had no prior or current business relationship with defendant (Second
Amended Complaint, ¶ 13). For the same reasons that this court cannot
conclude that plaintiff gave the Customer apparent authority to consent to
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receive calls from defendant, at this pre-discovery stage of litigation the
court cannot conclude that plaintiff and defendant had an established
business relationship for purposes of the TCPA.
CONCLUSION
For the reasons stated above, defendant’s motion to dismiss
is denied. Defendant shall file an Answer to the Second Amended
Complaint by January 18, 2021.
Dated: January 4, 2021
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
January 4, 2021, by electronic and/or ordinary mail.
s/Brianna Sauve
Deputy Clerk

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