S&A Tire and Auto Inc. v. A.U.L. Corp. et al

Filing 33

MEMORANDUM AND ORDER DENYING MOTION TO DISMISS OR FOR SUMMARY JUDGMENT: For the foregoing reasons, IT IS HEREBY ORDERED that defendants motion to dismiss or for summary judgment (ECF No. 15 ) is denied. Signed by Magistrate Judge David D. Noce on 1/24/17. (JAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
S & A TIRE AND AUTO, INC.
d/b/a ELLISVILLE FIRESTONE,
Plaintiffs,
v.
A.U.L. CORP.,
Defendant.

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No. 4:16 CV 1180 DDN

MEMORANDUM AND ORDER
DENYING MOTION TO DISMISS OR FOR SUMMARY JUDGMENT
This action is before the court on the motion of defendant A.U.L. Corp. (“AUL”)
to dismiss plaintiff’s claims under Federal Rule of Civil Procedure 12(b)(6), or, in the
alternative, for summary judgment in AUL’s favor under Rule 56. (ECF No. 15). The
parties have consented to the exercise of plenary authority by the undersigned United
States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below,
the court denies the motion.

I. BACKGROUND
In its Missouri state court petition (ECF No. 5) plaintiff S&A Tire and Auto, Inc.
("S&A") alleges the following.

Defendant AUL provides service contracts in the

automobile industry. On April 27, 2016, S & A received a facsimile transmission from
defendant AUL. The fax contained a large header with AUL’s logo and stated:
Online Claims available to all licensed repair facilities!
Hi Everyone,
We now have 24/7/365 Online Claims available to all licensed repair facilities.
This new feature available is a great tool for service departments to stay off the
phone and stay in front of their customers.

Visit aulcorp.com and click on the “Online Claims” icon located at the top right to
register today!
Questions contact AUL Web Support now for a web demonstration at
800.826.3204, Ext 460 or at [e-mail].
Some good things to know about AUL Online Claims:
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Fast, secure, and, convenient way of filing AUL claims
Available online 24/7, no need to get on the phone
Smart phone or tablet capabilities
Easy access to view, edit or print claims submitted
Upload supporting pictures or files
Ability to create online claims accounts for employees, giving you the
opportunity to view all your AUL Claims in one place

Thank you,
AUL Corp.
Copyright © 2016 AUL CORP. All rights reserved. Our mailing address is: 1250
Main St. #300, Napa, CA 94559
(ECF No. 5, Ex. 1). Plaintiff seeks relief against AUL under the federal Telephone
Consumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227, on behalf of itself and all
others similarly situated. More specifically, plaintiff alleges defendant's fax transmission
violated the TCPA, because defendant used a telephone facsimile machine or similar
device to send the unsolicited fax transmission as an advertisement for defendant's work
or operations. Plaintiff further alleges that the fax transmission lacked a legally sufficient
notice informing the recipient of the ability and means to avoid future unsolicited
advertisements. (Id.).

II. MOTION TO DISMISS
Defendant AUL moves to dismiss the petition because AUL and plaintiff had an
ongoing business relationship and the fax at issue was not an advertisement under the

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TCPA. Plaintiff counters that it has pled facts sufficient to state a claim under the TCPA
and that the motion to dismiss is impermissibly based on matters beyond the complaint.

a. Legal Standard
A motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6)
challenges the legal sufficiency of the claim. To survive a Rule 12(b)(6) motion to
dismiss, the pleading must include “enough facts to state a claim to relief that is plausible
on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility
standard requires the pleading to contain “more than labels and conclusions.” Id. at 555.
It must contain “factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). In determining whether this standard is met, the court accepts the allegations in
the pleading as true and views them liberally in the light most favorable to the plaintiff.
Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008).
The court may not consider matters outside the pleadings on a motion to dismiss,
unless the motion is considered one for summary judgment under Rule 56. Fed. R. Civ.
P. 12(d). The facsimile document attached to plaintiff's petition as an exhibit is not
considered as being outside the pleadings; it may be considered on the issue of whether
plaintiff's petition states a claim on which relief can be granted. Fed. R. Civ. P. 10(c) ("A
copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all
purposes.").

b. Discussion
The TCPA prohibits the use of a fax machine to send unsolicited advertisements.
47 U.S.C. § 227(b)(1)(C). An unsolicited advertisement is “any material advertising the
commercial availability or quality of any property, goods, or services which is
transmitted to any person without that person’s prior express invitation or permission, in
writing or otherwise.” Id. at § 227(a)(5). The TCPA provides an exception in which it is

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permissible to send an unsolicited advertisement: if (1) the ad is from a sender with an
established business relationship with the recipient, (2) the recipient has voluntarily
communicated its fax number, and (3) the ad contains an “opt-out” notice. Id. at §
227(b)(1)(C). Private parties who have received unsolicited advertisements in violation
of the TCPA may bring an action for an injunction or money damages. Id. at § 227(b)(3).
Defendant argues that the subject fax is not an unsolicited advertisement, because
it did not promote the purchase of a new service; it only invited online participation from
an existing customer. This argument in effect denies the facts pled by plaintiff. It is in
the vein of an answer to plaintiff’s allegations, not an affirmative defense that the
plaintiff’s claim, even if true, fails as a matter of law. See Fed. R. Civ. P. 12(b)(6).
When viewing the facts pled by plaintiff in the light most favorable to plaintiff,
they are sufficient to state a claim under the TCPA. First, the plaintiff alleges that no
established business relationship existed between AUL and the class members, including
plaintiff. (ECF No. 5, ¶ 29). Second, AUL’s fax announced to recipients that its
commercially available service contracts had a new feature: online claims. (ECF No. 5,
Ex. 1). The fax explicitly invited recipients to visit AUL’s website to register for this
feature and promoted the feature’s speed, security, convenience, accessibility, and 24/7
availability.
Several courts have found faxes inviting online participation to be advertisements
under the TCPA when that participation promoted commercial activity.

See, e.g.,

Neurocare Inst. Of Cent. Florida, P.A. v. Healthtap, Inc., 8 F. Supp. 3d 1362, 1367 (M.D.
Fla. 2014) (where fax invited doctors to participate in a website answering medical
questions posed by the public, which would presumably enable the physicians to build
their practice’s clientele) ; G.M. Sign, Inc. v. MFG.com, Inc., No. 08 C 7106, 2009 WL
1137751, at *3 (N.D. Ill. Apr. 24, 2009) (where fax invited recipients to join a free online
marketplace in hopes of connecting buyers and sellers of goods and services).
The facts as pled are sufficient for the court to infer that AUL sent the fax to
induce its recipients, including plaintiff, to use AUL’s commercially available services.
Taking the facts plaintiff pled as true, the court cannot find at this stage that the fax falls
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outside the definition of “unsolicited advertisement” as a matter of law. Based on the
pleadings, it also cannot find that the parties had an established business relationship.
The motion to dismiss is therefore denied.

III. SUMMARY JUDGMENT
Defendant argues in the alternative that it is entitled to summary judgment because
there is no genuine issue of fact as to (1) the on-going business relationship between it
and plaintiff and (2) the nature of the fax as an advertisement. Plaintiff’s response
disputes both of these facts and argues that the motion for summary judgment is
premature. The court agrees.

a. Legal Standard
Summary judgment is appropriate “if there is no dispute of material fact and
reasonable fact finders could not find in favor of the nonmoving party.” Shrable v. Eaton
Corp., 695 F.3d 768, 770 (8th Cir. 2012); see also Fed. R. Civ. P. 56(a). The party
moving for summary judgment must demonstrate the absence of a genuine issue of
material fact and that it is entitled to judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 327 (1986). To implement Rule 56, this court's local rules require
a motion for summary judgment to have a separate statement of uncontroverted material
facts, set forth in separately numbered paragraphs. E.D.Mo. L.R. 4.01. In response, the
non-moving party must demonstrate that disputes of fact do exist. Id. “Evidence, not
contentions, avoids summary judgment.” Reasonover v. St. Louis County, Mo., 447 F.3d
569, 578 (8th Cir. 2006).

b. Discussion
Defendant’s motion fails to demonstrate that it is entitled to judgment as a matter
of law. First, the motion does not include the required statement of uncontroverted
material facts. Also, the motion fails to demonstrate that the material facts are beyond
dispute. The defendant's proffered facts indicate only that AUL had an “existing business
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relationship” with plaintiff at the time the fax was sent. Even if this fact is undisputed,
AUL would not be entitled to judgment as a matter of law. By itself, an existing business
relationship with plaintiff does not establish that the subject fax was not an unsolicited
ad. The existing business relationship exemption upon which AUL relies does not render
an advertisement unsolicited. 42 U.S.C. § 227(b)(1)(C). Instead, it allows a party who
has an existing business relationship with a fax recipient to lawfully fax them an
unsolicited ad if the recipient has voluntarily communicated its fax number and the ad
contains an “opt-out” notice. Id. See also In re Rules & Regulations Implementing the
Tel. Consumer Prot. Act of 1991 Junk Fax Prevention Act of 2005, 21 F.C.C. Rcd. 3787,
3798 (2006). Putting the question of how AUL obtained plaintiff’s fax number aside, the
fax at issue does not contain an opt-out notice. Accordingly, the court cannot hold that
the business relationship exemption entitles defendant to summary judgment as a matter
of law.
Considering that the actual content of the subject fax is undisputed, and while
defendant’s arguments that this was an informational or transactional communication, not
a commercial ad, may have some merit, the record does not establish that other relevant
facts are not in dispute, e.g., the specific nature of the relationship between plaintiff and
defendant and whether the fax was an informational update regarding an existing,
ongoing account. Summary judgment is therefore not appropriate at this time.

ORDER
For the foregoing reasons,
IT IS HEREBY ORDERED that defendant’s motion to dismiss or for summary
judgment (ECF No. 15) is denied.
/S/ David D. Noce
l
UNITED STATES MAGISTRATE JUDGE
Signed on January 24, 2017.

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