Fredy D. Osorio v. State Farm Bank, F.S.B.

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-10951
________________________
D.C. Docket No. 0:11-cv-61880-DMM
FREDY D. OSORIO,
Plaintiff - Appellant,
versus
STATE FARM BANK, F.S.B.,
Defendant - Third-Party Plaintiff - Appellee,
versus
CLARA BETANCOURT,
Third-Party Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(March 28, 2014)
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Before ANDERSON and GILMAN, ∗ Circuit Judges, and JOHNSON, ∗ ∗ District
Judge.
GILMAN, Circuit Judge:
This is a consumer-protection case arising from the unwanted receipt of
autodialed debt-collection calls to a cell phone. It began when Clara Betancourt
applied for a car-insurance policy with State Farm in 2007. At the conclusion of
the car-insurance application process, the State Farm agent suggested that
Betancourt open a State Farm credit-card account so that the policy premium could
be charged to the credit card. During the application process, Betancourt gave
State Farm the phone number 754-244-8626 (No. 8626). Betancourt contends that
she gave this number only as an emergency-contact number that belonged to her
housemate Fredy D. Osorio, with whom she shares a cell-phone plan. State Farm,
on the other hand, maintains that Betancourt gave the number as her work-phone
number and that it does not collect emergency-contact information from
policyholders.
∗
Honorable Ronald Lee Gilman, United States Circuit Judge for the Sixth Circuit, sitting
by designation
∗∗
Honorable Inge Prytz Johnson, United States District Judge for the Northern District of
Alabama, sitting by designation
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In 2010, Betancourt failed to timely pay the minimum balance due on her
credit card. This caused State Farm’s agent to place 327 autodialed calls to No.
8626 over a six-month span in an attempt to collect the balance due. Osorio sued
State Farm under the Telephone Consumer Protection Act (TCPA), 47 U.S.C.
§ 227, which provides a damages remedy for cellular-phone subscribers who
receive autodialed phone calls without having given prior express consent to
receive such calls. State Farm, in turn, sued Betancourt for the balance due (plus
legal expenses) on her delinquent credit-card account and for its legal expenses in
defending itself against Osorio’s TCPA lawsuit, the latter claim being based on
Betancourt’s alleged negligent misrepresentation regarding the telephone number
that she had provided to State Farm.
On cross-motions for summary judgment, the district court ruled for State
Farm with regard to both complaints. The court first held that Betancourt had
consented to Osorio receiving calls from State Farm and that neither Betancourt
nor Osorio had effectively revoked this consent because they did not do so in
writing. Second, on State Farm’s breach-of-contract claim, the court held that
Betancourt was delinquent on her credit-card debt. The court’s final ruling was
that Betancourt had negligently misrepresented that No. 8626 was her phone
number, thereby causing State Farm to incur approximately $132,000 in legal fees
defending itself against Osorio’s action.
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It entered judgment accordingly. For the reasons set forth below, we
REVERSE the district court’s grant of summary judgment to State Farm on
Osorio’s TCPA claim, REVERSE its grant of summary judgment to State Farm on
the latter’s negligent-misrepresentation claim against Betancourt, and REMAND
the case for further proceedings consistent with this opinion.
I. BACKGROUND
A. Factual background
In May 2007, Clara Betancourt met with a State Farm agent to apply for car
insurance from State Farm Mutual Automobile Insurance Company. She also
applied for a credit card from State Farm Bank to pay for the insurance policy.
Betancourt applied for the car-insurance policy first. During the application
process, State Farm’s agent asked Betancourt questions orally and then entered
Betancourt’s responses into his computer. The parties agree that State Farm asked
for Betancourt’s home number, her work number, and her cell number during the
application process.
At some point during this process, Betancourt gave State Farm the No. 8626.
She testified in her deposition that “I put it down as an emergency contact[,] . . . to
be for an emergency or something serious.” Betancourt acknowledged, however,
that the number appears on the car-insurance application on the line marked “Work
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Phone.” She further concedes that she signed the application after it was filled in,
but contends that she did not understand it.
After completing Betancourt’s car-insurance application, the agent offered to
put Betancourt’s insurance payment on a State Farm credit card. Betancourt
agreed. She says that the agent then used the information that he had already taken
for the insurance application to apply for the credit card. The credit-card
application listed 954-963-1917 (No. 1917) as Betancourt’s home phone, 954-549-
7596 (No. 7596) as Betancourt’s work phone, and No. 8626 as Betancourt’s cell
phone.
Documents produced by the phone company, Metro PCS, indicate that
No. 8626, along with 754-244-5645 (No. 5645) and 754-244-2131 (No. 2131),
were all connected to a single “individual” account that belonged to Osorio.
Betancourt and Osorio both testified in their respective depositions that No. 8626
belonged to Osorio, and Betancourt testified that No. 5645 belonged to her. She
further testified that No. 2131 belonged to John Fredy Osorio, who is the adult son
of Betancourt and Osorio.
Betancourt and Osorio have known each other for many years. They lived
together in South Florida at all times relevant to this case.
Betancourt modified her contact information in connection with the credit
card several times in the years that followed. In June 2007, she returned a change-
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of-address form to State Farm Bank that she had received along with her bill.
Betancourt testified that she did not understand the form, but nonetheless filled it
out, listing No. 1917 as her home phone and No. 8626 as her work phone. State
Farm’s records subsequently show that “[o]n May 29, 2008, Betancourt requested
that State Farm Bank update its records to reflect her home phone number had
changed to [No. 8626], replacing the home number of [No. 1917].” She apparently
did this over the telephone.
Of particular importance for the purpose of this appeal, Betancourt testified
in her deposition that on September 29, 2010, she again spoke with someone from
State Farm and informed the agent that (1) No. 5645 was her cell-phone number,
and (2) No. 8626 was Osorio’s number to be used “only for emergencies.” She
also says that at this time she told State Farm to call her only on No. 1917. State
Farm acknowledges that Betancourt called on September 29, 2010 to request that
her records be updated, but contends that she gave No. 5645 as her home number
and that she made no change to the listing of No. 8626 as her work number.
Betancourt made regular payments on her credit card until November 26,
2010, on which date she failed to make a payment. As a result, State Farm
authorized a collection agency, FMS, Inc., to attempt to collect the debt as State
Farm’s agent. State Farm gave FMS No. 5645 as Betancourt’s home number and
No. 8626 as Betancourt’s work number. FMS made calls to these numbers
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beginning on November 29, 2010 and concluding on May 31, 2011, including 327
autodialed calls to No. 8626.
State Farm maintains that at no time did anyone answering No. 8626 tell it
that the number did not belong to Betancourt. The person answering simply said
that Betancourt was not available. State Farm says that it did not learn that No.
8626 was Osorio’s number until after the filing of this lawsuit. Osorio, on the
other hand, testified that he twice told State Farm’s agent to “Please stop calling”
when the agent called him on No. 8626. He says that these callers always spoke in
English, and that he did not understand them.
Betancourt acknowledges that she had an outstanding credit-card balance of
$7,945.10 as of June 1, 2011. She explained that this amount was in large part due
to State Farm’s decision to raise her annual interest rate to 24%.
B. Procedural background
Osorio sued State Farm in August 2011, alleging violations of the TCPA.
Four months later, State Farm filed a Third-Party Complaint against Betancourt,
asserting claims for (1) common-law indemnification because “[t]he credit
agreement between State Farm and Betancourt formed a legal special relationship,”
making any “damages Osorio alleges in his complaint . . . a result of Betancourt’s
acts or omissions”; (2) contractual indemnification based on the credit-card
agreement’s provision making Betancourt liable for collection costs; (3) breach of
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contract for Betancourt’s failure to pay her credit-card bill; (4) negligent
misrepresentation for Betancourt giving Osorio’s number as her own; (5) account
stated for the outstanding balance on Betancourt’s credit card; and (6) open
account for debts under the credit-card agreement.
Betancourt, Osorio, and State Farm all separately moved for summary
judgment on their respective claims and defenses. The district court granted
summary judgment to State Farm on Osorio’s claim and also granted summary
judgment to State Farm on four of its claims against Betancourt. Relying on this
court’s unpublished opinion in Meadows v. Franklin Collection Services, Inc., 414
F. App’x 230, 235 (11th Cir. 2011) (per curiam), the district court reasoned that
“[i]f Osorio could sue State Farm for over $75,000 because the woman with whom
he cohabitates with [sic] and had a child with provided ‘his’ number to State Farm
on multiple occasions, debt collectors would be held liable whenever a debtor lists
a family member’s number as his own.” The court further reasoned that
Betancourt provided express consent for State Farm to call No. 8626 and had the
authority to do so because she lives with Osorio, had a son with him, and shares a
cell-phone plan with him that is listed in his name. Finally, the court held that
consent cannot be revoked orally under the TCPA, relying on out-of-circuit district
court cases holding to that effect.
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In a separate order entered the same day, the district court determined that
State Farm’s indemnification claims were moot in light of the court’s holding that
State Farm was not liable for the calls. The court further ruled that Betancourt had
breached the credit-card agreement by failing to pay her minimum balance on time
and by failing to provide a valid phone number. On State Farm’s negligent-
misrepresentation claim, the court held that Betancourt misrepresented to State
Farm that No. 8626 was her phone number and did so knowingly. The court thus
determined that Betancourt was liable for $132,419.90 in legal fees incurred by
State Farm in defending itself against Osorio’s TCPA claim.
It also ruled for State Farm on its claims for account stated and open account
in the amount of $8,355.27, “with an additional $1.03 per diem rate beginning after
May 30, 2012.” Finally, the court held Betancourt and Osorio jointly and severally
liable to State Farm for costs in the amount of $4,952.15. Betancourt and Osorio
have appealed the district court’s judgments with respect to the TCPA and
negligent-misrepresentation claims; Betancourt has not appealed the district court’s
judgment against her for account stated and open account.
II. JURISDICTION
Before addressing the merits of this case, we note that Osorio asserted
jurisdiction based on diversity of citizenship, alleging that State Farm is a citizen
of Illinois, that he is a citizen of Florida, and that the amount in controversy
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exceeds $75,000. Since the filing of the Complaint, the Supreme Court has held
that state and federal courts have concurrent jurisdiction over TCPA claims. See
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 745 (2012) (“We find no
convincing reason to read into the TCPA’s permissive grant of jurisdiction to state
courts any barrier to the U.S. district courts’ exercise of the general federal-
question jurisdiction they have possessed since 1875.”). Jurisdiction is thus also
proper under the Federal-Question Statute, 28 U.S.C. § 1331. See Mims, 132 S. Ct.
at 748 (“Because federal law creates the right of action and provides the rules of
decision, Mims’s TCPA claim, in 28 U.S.C. § 1331’s words, plainly aris[es] under
the laws . . . of the United States.”) (alteration in original) (internal quotation
marks omitted).
II. OSORIO’S CLAIMS AGAINST STATE FARM
A. Standard of review
“We review a district court’s order of summary judgment de novo, viewing
all evidence and drawing all reasonable inferences in favor of the nonmoving
party.” Pesci v. Budz, 730 F.3d 1291, 1295 (11th Cir. 2013). “The court shall
grant summary judgment if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a).
B. TCPA
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Osorio contends on appeal that the district court made two critical errors.
First, Osorio argues that the court misinterpreted the TCPA when it held that
Betancourt had the authority to consent to receiving autodialed debt-collection
calls on No. 8626. Second, Osorio claims that the court should have found that he
revoked any consent that State Farm may have had to call his number when he told
State Farm’s agent to stop calling. State Farm responds that Betancourt validly
gave her consent because she had “common authority over the phone” and because
Osorio’s request was both ambiguous in scope and not in writing. It also contends
that the TCPA prohibits autodialed calls only when the called party is charged for
each specific call.
1. Legal framework
The key provision of the TCPA applicable to this case is 47 U.S.C.
§ 227(b)(1)(A)(iii), which provides in pertinent part that
[i]t shall be unlawful for any person within the United States, or any
person outside the United States if the recipient is within the United
States—
(A) to make any call (other than a call made for
emergency purposes or made with the prior express
consent of the called party) using any automatic
telephone dialing system or an artificial or prerecorded
voice—
...
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(iii) to any telephone number assigned to a paging
service, cellular telephone service, specialized
mobile radio service, or other radio common
carrier service, or any service for which the called
party is charged for the call . . . .
47 U.S.C. § 227(b)(1)(A)(iii).
The statute further specifies that the appropriate remedy is “an action to
recover for actual monetary loss from such a violation, or to receive $500 in
damages for each such violation, whichever is greater.” 47 U.S.C. § 227(b)(3)(B).
Treble damages are also available for knowing or willful violations. Id.
§ 227(b)(3) (concluding language).
2. “[P]rior express consent of the called party”
This circuit has not yet addressed the meaning of the term “called party” as
used in the TCPA, but State Farm argues that an unpublished decision, Meadows v.
Franklin Collection Service, Inc., 414 F. App’x 230 (11th Cir. 2011) (per curiam),
is directly on point. In Meadows, a debt-collection agency placed numerous
prerecorded calls to Meadows’s home in an attempt to collect on debts owed by the
previous residents of the home and by Meadows’s daughter. This court ruled that
the debt collector “did not violate the TCPA because . . . [it] had an existing
business relationship with the intended recipient of its prerecorded calls.” Id. at
235. Based upon the quoted language, State Farm argues that the “called party”
within the meaning of the TCPA must be the “intended recipient.” This would
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mean that Betancourt, as the intended recipient of State Farm’s calls, could consent
to Osorio receiving the calls on No. 8626.
Meadows, however, is of very limited value. To start with, the case
concerned 47 U.S.C. § 227(b)(1)(B), which prohibits “initiat[ing] any telephone
call to any residential telephone line using an artificial or prerecorded voice to
deliver a message without the prior express consent of the called party.” (emphasis
added). No. 8626, the telephone number in question here, is a cell-phone number.
Moreover, 47 U.S.C. § 227(b)(2)(B) permits the FCC “by rule or order, [to]
exempt [certain categories of calls] from the requirements of paragraph (1)(B) of
this subsection [i.e., 47 U.S.C. § 227(b)(1)(B)].” In 1992, the FCC promulgated
just such a regulation, one that exempts calls “made to any person with whom the
caller has an established business relationship at the time the call is made.” 47
C.F.R. § 64.1200(a)(2)(iv). The Meadows court relied on this exemption when it
determined that the debt collector “did not violate the TCPA because . . . [it] had
an existing business relationship with the intended recipient of its prerecorded
calls.” Meadows, 414 F. App’x at 235.
As Osorio points out, whatever the merits of Meadows, 47 U.S.C.
§ 227(b)(2)(B) does not authorize rulemaking with regard to 47 U.S.C.
§ 227(b)(1)(A)(iii), the provision in question here. The term “intended recipient”
as used in Meadows, moreover, is discussed in connection with the words “made to
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any person” as used by the regulation, 47 C.F.R. § 64.1200(a)(2)(iv) (2008), and
was not directed at the term “called party” as used by the statute. See Meadows,
414 F. App’x at 235. And because the regulation does not bear on
§ 227(b)(1)(A)(iii), neither does Meadows.
Only one court of appeals, the Seventh Circuit, appears to have addressed
the meaning of the term “called party” in the context of 47 U.S.C.
§ 227(b)(1)(A)(iii). In a case brought by cell-phone subscribers receiving debt-
collection calls directed at prior subscribers to their phone numbers, Judge
Easterbrook canvassed the statute and reasoned as follows:
Section 227 uses the phrase “called party” seven times all told. Four
unmistakably denote the current subscriber (the person who pays the
bills or needs the line in order to receive other calls); one denotes
whoever answers the call (usually the subscriber); and the others (the
two that deal with consent) have a referent that cannot be pinned
down by context. [Defendant] Enhanced Recovery asks us to
conclude that, despite the presumption of uniform usage within a
single statutory section, those two uses, and those two alone, denote
the person Bill Collector is trying to reach—in other words, Customer,
who Enhanced Recovery dubs the “intended recipient of the call.”
Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 640 (7th Cir. 2012). But, as
Judge Easterbrook explained, “The presumption that a statute uses a single phrase
consistently, at least over so short a span, see Mohasco Corp. v. Silver, 447 U.S.
807 (1980), implies that the consent must come from the current subscriber.”
Soppet, 679 F.3d at 639–40. We agree.
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The Seventh Circuit also expressly refuted State Farm’s contention that the
statute uses the term “called party” to refer to the intended recipient of the phone
call:
The phrase “intended recipient” does not appear anywhere in § 227,
so what justification could there be for equating “called party” with
“intended recipient of the call”? (Section 227(b)(1) does use the word
“recipient” in a context where “recipient” means “current subscriber”;
this doesn’t remotely suggest that “called party” must mean “intended
recipient.”) Enhanced Recovery starts with the proposition that
consent is effective until revoked and infers that Customer’s consent
thus must last until Bystander, the new subscriber, revokes it. The
idea that one person can revoke another’s consent is odd. Anyway,
there can’t be any long-term consent to call a given Cell Number,
because no one—not Customer, not Bystander, not even the phone
company—has a property right in a phone number. See Jahn v. 1–
800–FLOWERS.com, Inc., 284 F.3d 807 (7th Cir. 2002). Consent to
call a given number must come from its current subscriber. Enhanced
Recovery implicitly acknowledges this by saying that the current
subscriber can rescind any earlier consent to call Cell Number. But
this really means that Customer’s authority to give consent, and thus
any consent previously given, lapses when Cell Number is reassigned.
Id. at 640–41.
We find this logic persuasive. Although State Farm argues that Betancourt
could consent to the debt-collection calls (she being the equivalent of the Customer
in Soppet), it also concedes that Osorio could revoke Betancourt’s consent (he
being the equivalent of the Bystander in Soppet). In tune with Judge Easterbrook’s
analysis, we believe this really means that Betancourt had no authority to consent
in her own right to the debt-collection calls to No. 8626 because one can consent to
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a call only if one has the authority to do so, and only the subscriber (here, Osorio)
can give such consent, either directly or through an authorized agent. We
accordingly reject State Farm’s argument that the “intended recipient” is the
“called party” referred to in 47 U.S.C. § 227(b)(1)(A).
Determining the meaning of the term “called party” is, however, only half of
our challenge. We must still decide how one obtains the “prior express consent” of
the called party. For purposes of this appeal only, we accept as valid the FCC’s
regulation to the effect that “autodialed . . . calls to wireless numbers that are
provided by the called party to a creditor in connection with an existing debt are
permissible as calls made with the ‘prior express consent’ of the called party.” In
re Rules & Reg. Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd.
559, 559 (2007). We do so because counsel for Betancourt and Osorio have
disclaimed any intent to challenge the regulation. But even accepting arguendo the
regulation’s validity, we must still determine whether Osorio, directly or indirectly,
gave No. 8626 to State Farm as a number to call in connection with Betancourt’s
debt. As applied to the facts of the present case, we must therefore decide whether
Betancourt had the authority to consent to Osorio receiving the calls, and whether
she in fact did so.
The district court held that Betancourt could provide the requisite consent
because she had “common authority” over No. 8626. It based this decision on the
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ruling in Guitierrez v. Barclays Group, No. 10cv1012, 2011 WL 579238 (S. D.
Cal. Feb 9, 2011). In Guitierrez, the plaintiff Ramon listed the cell-phone number
of his wife, Clariza, on a credit-card application. He eventually defaulted on the
payments, provoking collection calls from the defendant. The district court held
that Ramon could consent to Clariza receiving the debt-collection calls, id. at *3,
relying on a Supreme Court decision issued in the Fourth Amendment context
holding “that permission to search [may be] obtained from a third party who
possessed common authority over or other sufficient relationship to the premises or
effects sought to be inspected.” Id. (quoting United States v. Matlock, 415 U.S.
164, 171 (1974)). The Fourth Amendment analogy, however, predates the cell-
phone era, and the equivalency that the Guitierrez court sought to draw is
otherwise lacking in authority. We therefore decline to adopt Guitierrez’s Fourth
Amendment “common authority” analogy.
The Third Circuit’s recent decision in Gager v. Dell Financial Services,
LLC, 727 F.3d 265 (3d Cir. 2013), offers a more compelling approach. Gager
concerned the same type of § 227(b)(1)(A)(iii) claim as presented here. The case
considered “whether the TCPA allows a consumer to revoke her ‘prior express
consent’ to be contacted via an automated telephone dialing system on her cellular
phone.” Id. at 268. Critically, the Third Circuit resolved this question based on
“the common law concept of consent.” Id. at 270. The Third Circuit also reasoned
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that, “in light of the TCPA’s purpose, any silence in the statute as to the right of
revocation should be construed in favor of consumers.” Id. These considerations
provide us with a useful roadmap for deciding whether Betancourt had the
authority to consent to Osorio receiving autodialed calls from State Farm.
“[W]here Congress uses terms that have accumulated settled meaning
under . . . the common law, a court must infer, unless the statute otherwise dictates,
that Congress means to incorporate the established meaning of these terms.”
Neder v. United States, 527 U.S. 1, 21 (1999) (second alteration in original)
(internal quotation marks omitted). “Consent” is such a term, as the Third Circuit
aptly explained:
Under the common law understanding of consent, the basic premise of
consent is that it is “given voluntarily.” Black’s Law Dictionary, 346
(9th ed. 2009); Restatement (Second) of Torts § 892 (“Consent is a
willingness in fact for conduct to occur.”). Further, at common law,
consent may be withdrawn. Restatement (Second) of Torts § 892A,
cmt. i (1979) (“[C]onsent is terminated when the actor knows or has
reason to know that the other is no longer willing for him to continue
the particular conduct.”); see also United States v. Greer, 607 F.3d
559, 564 (8th Cir. 2010) (discussing a criminal suspect’s right to
withdraw consent to a search); Desnick v. Am. Broad. Cos., Inc., 44
F.3d 1345, 1351 (7th Cir. 1995) (discussing the common law right of
a proprietor to revoke consent for a patron to enter a store).
Gager, 727 F.3d at 270–71. The same logic is applicable to the concept of consent
in this case: To fall within § 227(b)(1)(A)(iii)’s consent exception, State Farm
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must demonstrate that it had the consent of Osorio, as defined by the common law,
to call No. 8626.
One way for State Farm to do so would be by demonstrating that Betancourt
had an agency relationship with Osorio that permitted her to consent to Osorio
receiving the calls, and by showing that she exercised that authority in this case by
giving No. 8626 to State Farm in connection with her debt. “It is settled law that
the acts of an agent, within the scope of his real or apparent authority, bind the
principal.” Peninsula Land Co. v. Howard, 6 So. 2d 384, 388 (Fla. 1941). Agency
can be viewed as having some overlap with Guitierrez’s notion of “common
authority” but, unlike the “common-authority” concept connected with criminal
law search and seizures, agency law developed in a civil context to handle
commercial and tort disputes more analogous to the TCPA.
Under Florida law,
[a]n agency relationship can arise by written consent, oral consent, or
by implication from the conduct of the parties. See Thomkin Corp. v.
Miller, 156 Fla. 388, 24 So. 2d 48, 49 (1945). An agency by
implication, or apparent agency, arises only when there has been (1) a
representation by the principal that the actor is his or her agent,
(2) reliance on that representation by a third party, and (3) a change in
position by the third party in reliance on that representation. See
Mobil Oil Corp. v. Bransford, 648 So. 2d 119, 121 (Fla. 1995). As to
the first element, when there has been no representation of authority
by the principal, no apparent or implied agency arises. See Smith v.
Am. Auto. Ins. Co., 498 So. 2d 448, 449 (Fla. 3d DCA 1986). The
acts of the agent, standing alone, are insufficient to establish that the
agent is authorized to act for the principal. See Owen Indus., Inc. v.
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Taylor, 354 So. 2d 1259, 1262 (Fla. 2d DCA 1978); Taco Bell of Cal.
v. Zappone, 324 So. 2d 121, 124 (Fla. 2d DCA 1975); Smith, 498
So. 2d at 449. Moreover, the scope of the agent’s authority is limited
to what the principal has authorized the agent to do. See Poe &
Assocs., Inc. v. Estate of Vogler, 559 So. 2d 1235, 1236 (Fla. 3d DCA
1990).
Stalley v. Transitional Hosps. Corp. of Tampa, Inc., 44 So. 3d 627, 630 (Fla. Dist.
Ct. App. 2010).
As applied to Osorio’s case, the key facts regarding agency are clearly in
dispute. Betancourt and Osorio testified in their respective depositions that they
have never given each other authority to consent to phone calls from third parties.
State Farm nevertheless contends that the court should infer such authority because
Osorio and Betancourt have an adult son and shared both a home and a cell-phone
plan. But State Farm’s argument, if accepted, proves too much. Parents and
cohabitants everywhere would be shocked to learn that every adult in their
household is legally entitled to consent to having autodialing debt collectors call
any of their cell phones. This is not to say that in some cases one adult might
authorize another adult to do so, but we cannot say that all cohabitants possess
such authority as a matter of law. Moreover, if, as Betancourt claims, she told
State Farm that No. 8626 was to be used only for emergencies, a jury could find
that she was exercising only a limited scope of agency, not the agency to consent
to 327 autodialed debt-collection phone calls to Osorio’s cell-phone number.
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A genuine dispute of material fact therefore exists as to whether Betancourt
acted as Osorio’s agent when she gave State Farm No. 8626 as a contact number.
Accordingly, this is not an issue that can properly be decided on summary
judgment. The issue must instead be submitted to a factfinder.
3. Revocation
On a related topic, the district court ruled that once Betancourt consented to
receiving autodialed calls on No. 8626, that consent could be revoked only in
writing. The court relied on four cases from the Western District of New York in
support of its ruling. Like the district court, those cases read the TCPA as
subordinate to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692
et seq., which requires a consumer to notify a debt collector in writing if the
consumer desires to stop further communication. See id. § 1692c(c). The district
court quoted from one such case, Starkey v. Firstsource Advantage, LLC, No. 07-
CV-662A, 2010 WL 2541756 at *5 (W.D.N.Y. Mar. 11, 2010), which held that “as
clearly stated in the December 28, 2007 FCC Declaratory Ruling, calls regarding
debt collection or to recover payments are not subject to the TCPA’s separate
restrictions on ‘telephone solicitations.’” (quoting Starkey, No. 07-CV-662A, 2010
WL 2541756 at *5).
The 2007 Declaratory Ruling, however, is hardly persuasive on the question
at hand. It states in pertinent part as follows:
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We also reiterate that the plain language of section 227(b)(1)(A)(iii)
prohibits the use of autodialers to make any call to a wireless number
in the absence of an emergency or the prior express consent of the
called party. We note that this prohibition applies regardless of the
content of the call, and is not limited only to calls that constitute
“telephone solicitations.” However, we agree with ACA and other
commenters that calls solely for the purpose of debt collection are not
telephone solicitations and do not constitute telemarketing. Therefore,
calls regarding debt collection or to recover payments are not subject
to the TCPA’s separate restrictions on “telephone solicitations.”
In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23
F.C.C. Rcd. 559, 565 (2007) (footnotes omitted).
The above reasoning is inapplicable to the present case. First, as the ruling
states, debt-collection calls are not exempt from 47 U.S.C. § 227(b)(1)(A)(iii); they
are exempt only from “the TCPA’s separate restrictions on ‘telephone
solicitations.’” 23 F.C.C. Rcd. at 565 (footnotes omitted). Second, the ruling’s
only reference to the FDCPA beyond that quoted above suggests that debt-
collection calls are subject to restrictions under both the TCPA and the FDCPA.
This other reference states that “[d]ebt collection calls are regulated primarily by
the Federal Trade Commission and are subject to the requirements of the Fair Debt
Collection Practices Act (FDCPA), which prohibits abusive, deceptive, and
otherwise improper collection practices by third-party collectors.” Id. at 559 n.2
(emphasis added). The word “primarily” clearly implies that other laws, such as
the TCPA, may also regulate debt-collection calls.
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Furthermore, nothing in the statutory text of the TCPA or of the FDCPA
indicates that compliance with the FDCPA excuses compliance with the TCPA.
The FDCPA explicitly specifies that “[i]f a consumer notifies a debt collector in
writing that the consumer refuses to pay a debt or that the consumer wishes the
debt collector to cease further communication with the consumer, the debt
collector shall not communicate further with the consumer with respect to such
debt.” 15 U.S.C. § 1692c(c) (emphasis added). Because the TCPA lacks
equivalent language, we have no reason to assume that Congress intended to
impose a similar in-writing requirement on the revocation of consent under the
TCPA.
We thus conclude that the district court’s reasoning conflates apples and
oranges. The FDCPA, on which both the district court and the Western District of
New York courts relied, is a separate statute with an independent cause of action
for violations.
We instead presume from the TCPA’s silence regarding the means of
providing or revoking consent that Congress sought to incorporate “the common
law concept of consent.” See Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 270
(3d Cir. 2013); see also Neder v. United States, 527 U.S. 1, 21 (1999) (“[W]here
Congress uses terms that have accumulated settled meaning under . . . the common
law, a court must infer, unless the statute otherwise dictates, that Congress means
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to incorporate the established meaning of these terms.”) (second alteration in
original) (internal quotation marks omitted). The statement of Senator Ernest
“Fritz” Hollings, who introduced the TCPA, indicates as much. Senator Hollings
noted that the bill “allows consent to be given orally, in writing, electronically, or
by any other means, as long as the consent is expressly given to the particular
entity making the call.” 137 Cong. Rec. 30,822 (1991). From this statement, one
can infer that Congress intended for the TCPA to incorporate the common-law
meaning of consent, including its revocation.
Common-law notions of consent generally allow oral revocation. See Pepe
v. Shepherd, 422 So. 2d 910, 911 (Fla. Dist. Ct. App. 1982) (“[I]t is axiomatic that
no agreement need be in writing unless required by statute or contract.”). Indeed,
counsel for State Farm conceded at oral argument that “the common law would
allow an oral revocation.” We therefore conclude that Betancourt and Osorio, in
the absence of any contractual restriction to the contrary, were free to orally revoke
any consent previously given to State Farm to call No. 8626 in connection with
Betancourt’s credit-card debt.
Furthermore, we note that allowing consent to be revoked orally is
consistent with the “government interest articulated in the legislative history of the
Act [that] enabl[es] the recipient to contact the caller to stop future calls.”
Maryland v. Universal Elections, Inc., 729 F.3d 370, 376–77 (4th Cir. 2013).
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Senator Hollings, the TCPA’s sponsor, described these calls as “the scourge of
modern civilization. They wake us up in the morning; they interrupt our dinner at
night; they force the sick and elderly out of bed; they hound us until we want to rip
the telephone out of the wall.” 137 Cong. Rec. 30,821 (1991). Senator Hollings
presumably intended to give telephone subscribers another option: telling the
autodialers to simply stop calling.
Finally, we note that the FCC has provided persuasive guidance confirming
that called parties may revoke their consent orally. In a recent declaratory ruling,
the FCC explained that “requests to stop receiving voice calls . . . can be confirmed
during the same call in which a consumer has expressed a desire to opt out.” In re
Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C.
Rcd. 15391, 15398 (2012). This guidance is not dispositive of the present case
because the FCC issued its ruling after the calls in question and because the ruling
may not have been promulgated with the requisite meaningful review to invoke
Chevron deference. See Gager, 727 F.3d at 271 n.5 (“Chevron deference appears
to be inappropriate here because the FCC never articulated a rationale for deciding
why the TCPA affords consumers the right to revoke their prior express consent.”).
Nevertheless, we find its common-sense interpretation to be of persuasive value.
See United States v. Mead Corp., 533 U.S. 218, 234 (2001) (“[A]n agency’s
interpretation may merit some deference whatever its form, given the specialized
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experience and broader investigations and information available to the agency, and
given the value of uniformity in its administrative and judicial understandings of
what a national law requires.”) (internal quotation marks omitted).
Accordingly, the question of whether either Betancourt or Osorio effectively
revoked whatever consent State Farm might have had to call No. 8626 should
proceed to a jury. Osorio says that he twice told State Farm to “stop calling.”
State Farm says that he did no such thing. This is exactly the kind of factual
dispute that cannot properly be resolved on summary judgment.
4. Charge requirement
We now turn to State Farm’s alternative argument that it is entitled to
summary judgment because of “the undisputed fact that neither Osorio nor
Betancourt were charged for the calls in question.” The TCPA prohibits calls “to
any telephone number assigned to a paging service, cellular telephone service,
specialized mobile radio service, or other radio common carrier service, or any
service for which the called party is charged for the call.” 47 U.S.C.
§ 227(b)(1)(A)(iii).
State Farm argues that the FCC has interpreted this provision to require a
separate charge for each call in order for the calls to be actionable. It also contends
that the “rule of punctuation” indicates that the “charged” clause modifies the
entire series—pager service, cellular service, etc. Osorio responds that the rule of
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punctuation is inapplicable and that the case instead falls within the more general
rule of “the last antecedent,” which specifies that “relative and qualifying words,
phrases, and clauses are to be applied to the words or phrase immediately
preceding, and are not to be construed as extending to or including others more
remote.” Bingham, Ltd. v. United States, 724 F.2d 921, 925 n.3 (11th Cir. 1984)
(internal quotation marks omitted). He also argues that the FCC’s guidance is not
controlling.
First, we do not accept State Farm’s contention that the FCC’s ruling in
question controls the outcome of this case. The applicable ruling reads in relevant
part as follows:
Based on the plain language of § 227(b)(1)[(A)](iii), we conclude that
the TCPA did not intend to prohibit autodialer or prerecorded message
calls to cellular customers for which the called party is not charged.
Moreover, neither TCPA nor the legislative history indicates that
Congress intended to impede communications between radio common
carriers and their customers regarding the delivery of customer
services by barring calls to cellular subscribers for which the
subscriber is not [charged].
In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7
F.C.C. Rcd. 8752, 8775 (1992). In our view, the key language is the second
sentence of the above-quoted ruling. The use of the word “[m]oreover” links the
two sentences and indicates that a narrower reading of the preceding sentence is
appropriate. We thus believe that the 1992 ruling was intended to exempt only
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“communications between radio common carriers and their customers” with regard
to autodialed calls for which the subscriber is not charged, and that the ruling does
not apply to third parties such as State Farm.
In support of its contrary argument, State Farm contends that we lack
jurisdiction in this case to cast doubt on the validity of the FCC’s order. But State
Farm’s argument is off the mark because we are not called upon here to assess the
order’s validity. We are instead simply deciding whether the FCC’s 1992 ruling is
applicable to the present case. And based on our analysis as set forth above, we
hold that it is not applicable regardless of whether it is otherwise valid.
In the end, we go back to the basic question of whether the TCPA itself
exempts all autodialed calls for which there is no charge. The applicable canons of
construction indicate that it does not. To repeat the key language, the Act prohibits
autodialed calls “to any telephone number assigned to a paging service, cellular
telephone service, specialized mobile radio service, or other radio common carrier
service, or any service for which the called party is charged for the call.” 47
U.S.C. § 227(b)(A)(1)(iii). The rule of the last antecedent requires the phrase “for
which the called party is charged for the call,” id., “to be applied to the words or
phrase immediately preceding [i.e., “any service”], and . . . not to be construed as
extending to or including others more remote,” see Bingham, Ltd. v. United States,
724 F.2d 921, 925 n.3 (11th Cir. 1984) (internal quotation marks omitted); namely,
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“paging,” “cellular telephone,” or “mobile radio” services, 47 U.S.C.
§ 227(b)(A)(1)(iii). We therefore presume that Congress did not intend the phrase
“for which the called party is charged for the call” to apply to cellular telephone
services.
Nevertheless, “[w]here the modifier is set off from two or more antecedents
by a comma, the supplementary ‘rule of punctuation’ states that the comma
indicates the drafter’s intent that the modifier relate to more than the last
antecedent.” Bingham, 724 F.2d at 925 n.3. This rule is, however, inapplicable to
the language in question. The modifier in this case, “for which the party is
charged,” is not set off from the series by a comma. That is, for the rule of
punctuation to apply, 47 U.S.C. § 227(b)(1)(A)(iii) would have to read “to any
telephone number assigned to a paging service, cellular telephone service,
specialized mobile radio service, or other radio common carrier service, or any
service, for which the called party is charged for the call.” Because the final
comma emphasized in the above iteration does not appear in the statute, we
conclude that the phrase “for which the called party is charged for the call”
modifies only “any service” and not the other terms of the series.
Reading the phrase “for which the party is charged” as modifying only “any
service” also comports with the canon against superfluity. The canon against
superfluity instructs that “[i]t is our duty to give effect, if possible, to every clause
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and word of a statute.” Duncan v. Walker, 533 U.S. 167, 174 (2001) (internal
quotation marks omitted). If the phrase “any service for which the called party is
charged for the call” requires that the party be charged per call for the “paging
service, cellular telephone service, specialized mobile radio service, or other radio
common carrier service” in order for the party to prohibit autodialed calls, then the
listing of these services would be superfluous because they are already included
under the term “any service for which the called party is charged.” On the other
hand, reading “any service for which the called party is charged for the call” as an
additional item beyond any call to a “paging service, cellular telephone service,
specialized mobile radio service, or other radio common carrier service,”
regardless of whether the called party is charged, gives independent meaning to
each term.
An interpretation of 47 U.S.C. § 227(b)(1)(A)(iii) that exempts all autodialed
calls to cellular phones for which the called party is not charged per call, moreover,
would clash with § 227(b)(2)(C) of the same statute. This latter section specifies
that the FCC
may, by rule or order, exempt from the requirements of paragraph
(1)(A)(iii) of this subsection calls to a telephone number assigned to a
cellular telephone service that are not charged to the called party,
subject to such conditions as the Commission may prescribe as
necessary in the interest of the privacy rights this section is intended
to protect.
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47 U.S.C. § 227(b)(2)(C). The provision allowing for the promulgation of
exemptions would be meaningless if, as State Farm proposes, § 227(b)(1)(A)(iii)
already exempts all calls for which the party is not charged per call.
Finally, we note that our interpretation is consistent with the decisions of our
sister circuits. The Ninth Circuit has interpreted the TCPA as not requiring that the
called party be charged for the call, albeit only in passing. See Satterfield v. Simon
& Schuster, Inc., 569 F.3d 946, 950 (9th Cir. 2009) (holding for the plaintiff
despite the defendant’s allegation that the plaintiff’s TCPA claim was deficient
because she was not charged for call). And the Fourth Circuit, in analyzing the
TCPA’s legislative history, noted that “[t]he TCPA protects residential privacy—a
government interest articulated in the legislative history of the Act.” Maryland v.
Universal Elections, Inc., 729 F.3d 370, 376–77 (4th Cir. 2013). To state the
obvious, autodialed calls negatively affect residential privacy regardless of whether
the called party pays for the call. We therefore find ourselves in good company in
holding that Osorio is not required to prove that he was charged individually for
each of the autodialed calls.
V. STATE FARM’S THIRD-PARTY COMPLAINT
We now turn to State Farm’s third-party complaint against Betancourt. The
district court held that Betancourt indisputably knew that No. 8626 was Osorio’s
number, but negligently represented to State Farm that it was her own. It further
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determined that State Farm indisputably relied on this representation, incurring
significant legal expenses to defend against Osorio’s current action.
Betancourt contends, however, that summary judgment was inappropriate on
this claim. She advances two arguments in support of her appeal. First,
Betancourt points out that if she is ultimately found to have had the authority to
consent to Osorio receiving the calls, then her consent could not possibly have
been a misrepresentation. Second, she argues that State Farm has failed to prove
the element of “justifiable reliance” because it had no justifiable reason to even
start the autodialing after she had informed State Farm that No. 8626 was only for
emergencies or to continue the autodialing after Osorio told State Farm’s agent to
stop calling. State Farm responds by claiming that neither Betancourt nor Osorio
in fact communicated any change from Betancourt’s earlier misrepresentation that
No. 8626 was her work number, making its legal bills recoverable under Florida’s
wrongful-act doctrine.
Florida follows the Restatement (Second) of Torts with respect to negligent
misrepresentation. Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So. 2d 334, 339
(Fla. 1997) (“By this opinion, we adopt the Restatement (Second) of Torts’
position on negligent misrepresentation contained in section 552.”). Section 552 of
the Restatement provides that
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[o]ne who, in the course of his business, profession or employment, or
in any other transaction in which he has a pecuniary interest, supplies
false information for the guidance of others in their business
transactions, is subject to liability for pecuniary loss caused to them
by their justifiable reliance upon the information, if he fails to exercise
reasonable care or competence in obtaining or communicating the
information.
Restatement (Second) of Torts § 552(1) (1977). Accordingly, this court has held
that
[u]nder Florida law, a claim of negligent representation requires
showing four elements:
(1) there was a misrepresentation of material fact; (2) the
representer either knew of the misrepresentation, made
the misrepresentation without knowledge of its truth or
falsity, or should have known the representation was
false; (3) the representer intended to induce another to act
on the misrepresentation; and (4) injury resulted to a
party acting in justifiable reliance upon the
misrepresentation.
Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Cos., 607 F.3d 742, 747 (11th Cir.
2010) certified question answered, 110 So. 3d 399 (Fla. 2013). Another significant
point is that “comparative negligence applies to an action for negligent
misrepresentation.” Gilchrist Timber, 696 So. 2d at 335.
We will now proceed to analyze the evidence with regard to each element in
turn. In so doing, we will determine whether summary judgment was appropriate
or whether genuine disputes of material fact necessitate a trial.
1. Misrepresentation of material fact
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State Farm argues that Betancourt misrepresented No. 8626 as her work
number. Betancourt responds by contending that she never represented the number
as her own, but instead listed it only as an emergency-contact number. This clearly
presents a genuine dispute of a material fact. The dispositive question appears to
be whether Betancourt told State Farm on September 29, 2010 that No. 8626 was
to be used only for emergencies. If she did, then she would have corrected any
material misrepresentation well before State Farm relied upon it following
Betancourt’s credit-card default almost two months later.
Betancourt says that she so informed State Farm. She testified in her
deposition that she told State Farm on September 29, 2010 that No. 1917 was her
home number and that No. 8626 was to be used only for emergencies. State Farm
acknowledges that Betancourt indeed called on that date to update her contact
information, but says that the only change was to reflect that No. 5645 was her
home number, with no change to the listing of No. 8626 as her work number. This
genuine dispute of material fact should properly be submitted to a jury.
2. Knowledge of falsity
Betancourt repeatedly says in her deposition that No. 8626 was Osorio’s
number. Accordingly, if she represented the number as her work number, she
would have known that it was false. Betancourt does not seriously contest this
element beyond denying that she so informed State Farm.
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3. Intent to induce another to act on the misrepresentation
Although Betancourt does not seriously contest that she intended State Farm
to rely on the information that she gave it, this element is nevertheless wrapped up
in a factual dispute over whether she told State Farm that No. 8626 was to be used
only for emergencies. If Betancourt gave the number as her work number, as the
June 12, 2007 change-of-address form indicates, and if she did not countermand
this information on September 29, 2010 as she contends, then a jury could find
that she did intend for State Farm to contact her at No. 8626 regarding her credit-
card debt. We therefore conclude that the dispute surrounding whether Betancourt
intended that State Farm contact her at No. 8626 in connection with her debt must
be decided by a jury.
4. Justifiable reliance on the misrepresentation
A party “is responsible for investigating information that a reasonable
person in the position of the recipient would be expected to investigate. Thus, a
recipient of an erroneous representation cannot hide behind the unintentional
negligence of the misrepresenter when the recipient is likewise negligent in failing
to discover the error.” Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010) (internal
quotation marks omitted).
Here, again, factual issues preclude summary judgment. If a jury were to
find that Betancourt told State Farm on September 29, 2010 that No. 8626 was
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“only for emergencies,” then a reasonable person would have investigated why it
was listed in State Farm’s records as her work number. Likewise, if Osorio twice
told State Farm to “stop calling,” a reasonable person would have inquired further
into the validity of No. 8626 as Betancourt’s contact number for debt collection.
The TCPA’s express-consent requirement reinforces this conclusion because
a reasonable person would have inquired, upon being told that the number was
only for emergencies or not to be called at all, whether he or she had consent to
call the number in connection with a debt. Accordingly, we hold that this element
should also be submitted to a jury.
5. Wrongful-act doctrine
State Farm further argues that it is entitled to recovery under Florida’s
wrongful-act doctrine. A recent decision by a Florida appellate court has explained
the doctrine as follows:
[W]here the wrongful act of the defendant has involved the claimant
in litigation with others, and has placed the claimant in such relation
with others as makes it necessary to incur expenses to protect its
interest, such costs and expenses, including reasonable attorney’s fees
upon appropriate proof, may be recovered as an element of damages.
Reiterer v. Monteil, 98 So. 3d 586, 588 (Fla. Dist. Ct. App. 2012) (alteration in
original).
State Farm asserts that the district court evaluated this claim, but does not
cite where in the record such an evaluation can be found. Moreover, State Farm
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provides no citation to a case where the Florida Supreme Court has recognized the
wrongful-act doctrine, and this court appears to have addressed it only in an
unpublished opinion in which the claim was deemed abandoned. See James
Ventures, L.P. v. TIMCO Aviation Servs., Inc., 403 F. App’x 425, 426 (11th Cir.
2010) (per curium). We therefore question how well-established the doctrine is in
Florida.
In any event, we have no reason to pursue such an evaluation at the present
stage of the case. This is because State Farm is entitled to legal fees under the
wrongful-act doctrine only if Betancourt’s actions were in fact wrongful. A jury
must make that determination for the reasons that we have just explained. If
Osorio is found to have authorized Betancourt to give No. 8626 to State Farm in
connection with her credit-card debt, then her actions were not wrongful. But if
Betancourt is found to have negligently misrepresented No. 8626 as her contact
number, and if State Farm is found to have reasonably relied on that
misrepresentation, then State Farm might be entitled to some recovery under the
wrongful-act doctrine. We leave this issue concerning the validity and
applicability of the wrongful-act doctrine to the district court for reconsideration in
the first instance.
For the same reason, we decline to determine at this time the reasonableness
of the approximately $132,000 in legal fees awarded to State Farm. That question
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is fully intertwined with the merits of the case. If, for example, State Farm is
found to have made its first three autodialed calls in reasonable reliance on
Betancourt’s negligent misrepresentation (causing a total of $1,500 in statutory
damages, or $4,500 if willful), but hundreds more calls were made in spite of a
subsequent revocation of consent, then spending $132,000 to defend a claim with a
maximum potential recovery of only $4,500 would appear unreasonable. This
issue will thus require consideration by the district court on remand.
V. CONCLUSION
For all of the reasons set forth above, we REVERSE the district court’s
grant of summary judgment to State Farm on Osorio’s TCPA claim, REVERSE its
grant of summary judgment to State Farm on the latter’s negligent-
misrepresentation claim against Betancourt, and REMAND the case for further
proceedings consistent with this opinion.
38