American Future System, Inc. v. Better Business Bureau of Eastern Pennsylvania

872 A.2d 1202, 2005 Pa. Super. 103, 2005 Pa. Super. LEXIS 406
CourtSuperior Court of Pennsylvania
DecidedMarch 21, 2005
StatusPublished
Cited by62 cases

This text of 872 A.2d 1202 (American Future System, Inc. v. Better Business Bureau of Eastern Pennsylvania) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Future System, Inc. v. Better Business Bureau of Eastern Pennsylvania, 872 A.2d 1202, 2005 Pa. Super. 103, 2005 Pa. Super. LEXIS 406 (Pa. Ct. App. 2005).

Opinion

OPINION BY

GANTMAN, J.:

¶ 1 Appellant, American Future Systems, Inc., d/b/a Progressive Business Publications (“PBP”) asks us to determine whether the trial court’s jury instructions and evidentiary rulings constituted error warranting the award of a new trial for defamation against Appellees, the Better Business Bureaus of Eastern Pennsylvania and Metropolitan Washington, D.C. (“BBB”). PBP additionally asks whether the court erred when it denied PBP’s motion for judgment as a matter of law (“JNOV”). We hold the court’s jury instructions and evidentiary rulings were proper and conclude PBP was not entitled to JNOV. Accordingly, we affirm the judgment entered on the jury’s verdict in favor of BBB.

¶2 The relevant facts and procedural history of this appeal are as follows. PBP is a publisher and telemarketer of numerous fast-read format newsletters. The newsletters contain business-related information for consumers in career areas such as sales, marketing, advertising, financial management, business management, human resources, and safety and regulatory compliance. PBP sells its newsletters through scripted telemarketing techniques. Telemarketers place calls to consumers at their places of employment during regular business hours, offering them “no-risk” trial subscriptions to newsletters. The consumers may review the first two issues free of charge. In the event consumers do not wish to purchase the newsletters, they need only write “cancel” on the first invoice. If a consumer agrees to try the free “no-risk” trial offer, the telemarketer is instructed to procure the consumer’s date of birth (excluding year) for verification purposes.

¶ 3 PBP generally sends the first invoice for payment to the consumer who agreed to the trial offer. If the first invoice is not returned to PBP with “cancel” written upon it and no payment is immediately forthcoming, PBP sends the second invoice to the accounts receivable department of the solicited consumer’s place of employment. Invoices are sent monthly. The invoices request payment, do not state the cancellation policy, and do not contain PBP’s phone number. PBP’s policy is to terminate, without further obligation, any subscription for which a cancelled invoice is received within six months after the initial phone call. After six months of nonpayment, however, past-due accounts are turned over to a collection agency. A typical annual subscription price is approximately $300.00. Ninety-two percent of the subscriptions are cancelled.

¶ 4 PBP employs approximately 500 telemarketers within 15 separate offices across several states. It telemarkets nationally and solicits 15,000 new subscriptions each week. PBP is headquartered in Malvern, PA, and is owned by Ed Satell, who has a 98% interest in the company. He testified that the company’s annual gross revenues have risen every year and totaled $29 million in 2002.

¶ 5 In early 2001, Mr. Satell became aware BBB had published an unsatisfactory reliability report regarding PBP. 1 The reliability report stated, in pertinent part:

*1207 While this company responds to customer complaints presented to it by this Bureau, this company has an unsatisfactory business performance record due to a pattern of customer complaints alleging billing for unordered merchandise. Some consumers have claimed that they cancelled subscriptions but their cancellations were not honored.

(BBB Reliability Report, March 2001, at 1). The second page of the report contained the following disclaimer:

As a matter of policy, the Better Business Bureau does not endorse any product, service, or company. BBB reports generally cover a three-year reporting period, and are provided solely to assist you in exercising your own best judgment. Information contained in this report is believed to be reliable but not guaranteed as to accuracy. Reports are subject to change at any time.

(Id. at 2). Mr. Satell contested the report in correspondence sent to BBB, stating PBP tape-records its telemarketer’s calls for training purposes and can disprove claims of unordered merchandise by confirming the birthdate of every consumer who has placed an order. Mr. Satell further stated the number of complaints BBB receives regarding PBP are infinitesimal when compared to the overall volume of PBP’s orders. Mr. Satell sought a retraction of the unsatisfactory reliability report.

¶ 6 Thereafter, BBB issued the following updated reliability report regarding PBP:

While this company responds to customer complaints presented to it by this Bureau, this company has an unsatisfactory business performance record due to a pattern of customer complaints alleging billing for unordered merchandise. Some consumers have claimed that they cancelled subscriptions but their cancellations were not honored. On March 16, 2001, [PBP] responded to the BBB concerning the company’s unsatisfactory business performance report. The company sells its publications through telemarketing solicitations. It claims that it tape records telephone solicitations for quality control purposes. The company states that it obtains the ordering person’s birthdate to verify the order at a later date. According to the correspondence, orders are confirmed by fax within 24 hours, giving the orderer an opportunity to respond. The company claims it has a liberal cancellation policy permitting the customer to cancel anytime within the first three months of the telephone order and receiving a refund on all unsent issues. New subscribers receive two free issues with the right to cancel according to the company. The company claims that its BBB complaint volume is negligible compared to its volume of business.

(BBB Reliability Report, April 2001, at 1). The updated report included the identical disclaimer contained in the earlier report.

¶ 7 Mr. Satell was dissatisfied with the content of the updated report. During the summer of 2001, at Mr. Satell’s urging, representatives of BBB met with him and several of his senior employees at the Mal-vern headquarters of PBP in an effort to resolve the unsatisfactory rating. When no resolution was reached, PBP filed a defamation action against BBB of Eastern PA, which included a claim for punitive damages. The complaint additionally alleged commercial disparagement and tor-tious interference with existing and pro *1208 spective business relations at Counts II and III, respectively.

¶ 8 BBB filed an answer with new matter. In July 2002, the court permitted PBP to file an amended complaint, joining BBB of Metropolitan Washington, D.C., as successor in interest to BBB of Eastern PA. BBB filed preliminary objections to the amended complaint. In December 2002, the court sustained BBB’s preliminary objections and dismissed Counts II and III of the amended complaint.

¶ 9 On June 2, 2003, BBB filed a motion for summary judgment on the remaining defamation claim. On July 2, 2003, PBP filed a cross-motion for summary judgment, contending BBB admitted all aver-ments in PBP’s amended complaint, due to BBB’s failure to answer the amended complaint. On July 11, 2003, BBB filed an answer with new matter to the amended complaint.

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Bluebook (online)
872 A.2d 1202, 2005 Pa. Super. 103, 2005 Pa. Super. LEXIS 406, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-future-system-inc-v-better-business-bureau-of-eastern-pasuperct-2005.