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Roylance v ALG Real Estate Services, Amerifund Lending et al | Litigation against collectors, debt buyers and their attorneys | Litigation Forum


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Roylance v ALG Real Estate Services, Amerifund Lending et al
Illegal mortgage marketing is back. The defendants failed to appear and the magistrate judge issued recommendations for default judgment, including an analysis of the claims regarding calls to a residential land line, treble damages and vicarious liability.
July 8, 2015
3:55 pm
Forum Posts: 51
Member Since:
May 5, 2013
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... Roylance also has alleged facts sufficient to show that ALG is vicariously liable for the conduct described above. Section 227(b)(1)(B) imposes liability on "any person" who "initiate[s] any telephone call" and Section 227(c)(5) provides a private right of action to a person who has received one or more telephone calls "by or on behalf of the same entity." Because Roylance alleges that all the prerecorded calls were anonymous and that all calls blocked caller identification,[54] Roylance's allegations do not definitively establish that ALG itself made these calls. However, the Ninth Circuit holds that imposition under the TCPA of "vicarious liability where an agency relationship, as defined by federal common law, is established between the defendant and a third-party caller" is "consistent" with the FCC's interpretation of the TCPA.[55] The FCC has "repeatedly acknowledged the existence of vicarious liability under the TCPA" and "has clarified that vicarious liability is imposed `under federal common law principles of agency for violations of either Section 227(b) or (c) that are committed by third-party telemarketers.'"[56]

Vicarious liability is appropriate when the plaintiff can demonstrate that a defendant "controlled or had the right to control [the entity that committed the TCPA violation], and more specifically, the manner and means of the [telemarketing campaign] it conducted."[57] The "FCC observed in its declaratory ruling . . . that it does `not believe it is appropriate to limit vicarious liability to the circumstances of classical agency (involving actual seller, or right to control, of the telemarketing call) . . . Principles of apparent authority and ratification may also provide a basis for vicarious seller liability for violations of section 227(b).'"[58] Apparent authority "can only `be established by proof of something said or done by the [alleged principal], on which [the plaintiff] reasonably relied.'"[59]

ALG is vicariously liable for the unlawful conduct described above because Roylance's allegations establish that ALG gave the unidentified caller who made the prerecorded calls and Mark Augustus apparent authority to conduct telemarketing on its behalf.[60] Roylance's conclusory allegations that the defendants "use telemarketing to sell their services" and that "telemarketing companies are agents of their principles" are not sufficient to establish that ALG is vicariously liable for telemarketer's conduct.[61] However, Roylance also alleges that Amerifund Lending Group, a name under which ALG does business, was identified on the papers included in the loan package and that the "papers were to be returned to Amerifund Lending."[62] In his declaration in support of his motion for default judgment, Roylance further alleges that the shipper of the loan package that he received was Amerifund Lending.[63] Roylance alleges that this loan package offered a refinance at a rate of 4.5 percent for thirty years, the same rate and time period as the mortgage the prerecorded call offered.[64] ...

On treble damages:

The court turns next to the question of remedies. Roylance has established that he is entitled to treble damages for ALG and Mark Augustus' violations of the TCPA but not to punitive damages under California Civil Code Section 3294. Although "factual allegations relating to liability are taken as true upon entry of default, allegations as to amount of damages are not automatically accepted."[100] The plaintiff "is required to prove all damages sought in the complaint."[101] A "judgment by default shall not be different in kind [or] exceed in amount that prayed for in the [complaint]."[102] The court may base its award on the declarations submitted by the plaintiff.[103]

The TCPA provides that a person may receive up to $500 in damages for each violation of Section 227(b) and (c).[104] Both of these subsections also provide that "if the court finds that the defendant willfully or knowingly violated [Section 227(b) or the regulations prescribed pursuant to Section 227(b)-(c)], the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available [in the case of non-willful conduct]."[105] Roylance contends that the individual defendants are liable for six violations of Section 227(b) and nine violations of Section 227(c) and that ALG is liable for one violation of Section 227(b) and four violations of Section 227(c) or in the alternative for the same violations as the individual defendants.[106] Based on this count, Roylance argues that he is entitled to trebled damages of $22,500 against the individual defendants and that ALG be held jointly and severally liable for this amount or individually liable for $7,500 in statutory damages.[107]

The court first addresses the question of how many separate violations of the TCPA Roylance has established. As stated above, Roylance argues that he is entitled to statutory damages for fifteen separate TCPA violations.[108] Roylance has established six violations of Section 227(b) because the six rerecorded calls he received violated this subsection. Roylance also has established that these six prerecorded calls and the two live calls he received from Mark Augustus as well as ALG and Mark Augustus' failure to provide him with a copy of their do-not-call policy violated Section 227(c).[109]Roylance thus has established that he is entitled to statutory damages for a total of fourteen separate TCPA violations based upon the six prerecorded calls that he received that violated both Section 227(b) and (c) and the two live calls that Mark Augustus made that violated Section 227(c).

The court next finds that Roylance can recover statutory damages for his claims under both Section 227(b) and Section 227(c). Roylance claims that recovery of damages under both causes of actions is proper because "different violations must be shown in the different causes" since Section 227(b) concerns automated calls and Section 227(c) concerns the FCC's do-not-call regulations.[110] The Ninth Circuit has not ruled on this issue, but the court finds persuasive the Sixth Circuit's holding that "the fact that the statute includes separate provisions for statutory damages in subsections (b) and (c) suggests that a plaintiff could recover under both."[111] Accordingly, Roylance may recover damages for both of his TCPA claims because "a person may recover statutory damages for violations of the automated-call requirements" and for violations of "the do-not-call-list requirements . . . even if both violations occurred in the same telephone call."[112]

Roylance also is entitled to treble damages because his allegations establish that ALG and Mark Augustus' conduct was willful and knowing. "The court observes that a split in authority exists regarding what qualifies" as knowing or willful conduct "warranting trebling."[113] "Some courts have held that a defendant must know that the making of the call violates the TCPA, while others have held that a defendant need only know that the call is being made."[114] Roylance argues in favor of the later interpretation, claiming that defendants did not need to know they were violating the TCPA in order to act willfully.[115] Roylance claims that "[i]ntent to do a wrongful act is not an essential element of willfulness" and that the FCC interprets willfulness to mean "simply that the act of which a violation arises was not an accident or mistake, even if the resulting violation was unintended."[116]

The case law supports Roylance's position that a person need not have intent to commit an unlawful act in order to act willfully or knowingly under the TPCA. For instance, in Sengenberger v. Credit Control Services, Inc., the court held that "intentionally" making phone calls that violated the TCPA was sufficient to warrant treble damages because "[a]lthough neither the TCPA nor the FCC regulations define the terms `willfully or knowingly' . . . courts have generally interpreted willfulness to imply only that an action was intentional."[117] Further, Sengenberger noted that "[w]hile the TCPA does not define willful, the Communications Act of 1943, of which the TCPA is a part, defines willful as `the conscious or deliberate commission or omission of such act, irrespective of any intent to violate any provision[], rule or regulation.'"[118]

Roylance's allegations show that ALG and Mark Augustus' TCPA violations were knowing and willful. ALG and Mark Augustus were aware that the first prerecorded call was made because Mark Augustus followed up on this call and ALG sent a loan package to Roylance regarding this call.[119] As Roylance notes, the demand letters he sent to Mark Augustus and ALG also provided the defendants with actual notice that five subsequent prerecorded calls he received were illegal.[120] Further, as Roylance states, blocking the identification of the caller on all the calls he received was a "deliberate choice."[121]

"Because Congress chose to employ a low threshold to assess treble damages, by requiring a caller's actions to be `knowing' or `willful' it is important to highlight" that the TCPA gives courts discretion to determine whether treble damages are appropriate."[122] The court finds that enhanced damages are appropriate here. As Roylance notes, "there is no indication that [the individual defendants] have stopped using prerecorded calls."[123] To the contrary, Roylance alleges that Mark Augustus continued "to use prerecorded calls and violate do-not-call requests."[124] Awarding treble damages "would serve to deter [defendants] from [making calls that violate TCPA] in the future and thereby promote the purpose of the TCPA."[125] As stated above, the court finds that ALG and Mark Augustus are jointly and severally liable for fourteen TCPA violations but Donecia Augustus is not liable. Accordingly, the court recommends that Roylance be awarded treble statutory damages in the amount of $21,000 against ALG and Mark Augustus. ...

Great ruling, especially for a pro se plaintiff!

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