CE Design, Ltd. v. C & T Pizza, Inc.

2020 IL App (1st) 181795

Opinion

2020 IL App (1st) 181795

FOURTH DIVISION Filing Date November 25, 2020

No. 1-18-1795 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

CE DESIGN LTD., an Illinois Corporation, Individually ) and as the Representative of a Class of Similarly Situated ) Appeal from the Persons, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) No. 06 CH 27638 v. ) ) The Honorable C&T PIZZA, INC.; JOSEPH CIANCIOLO; and FRAN ) Sanjay Tailor, CIANCIOLO, ) Judge, Presiding. ) Defendants-Appellees. )

JUSTICE HALL delivered the judgment of the court, with opinion. Presiding Justice Gordon and Justice Reyes concurred in the judgment and opinion.

OPINION

¶1 Plaintiff CE Design, Ltd., appeals from an order of the circuit court, which granted

defendants’ motion for summary judgment on plaintiff’s class action complaint, based upon

violations of the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227(b)(1)(C)

(2006)) and the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) No. 1-18-1795

(815 ILCS 505/2 (West 2018)) and conversion. For the reasons that follow, we affirm the circuit

court’s judgment.

¶2 I. BACKGROUND

¶3 Much of the background relative to this case was set forth in a prior interlocutory appeal,

CE Design Ltd. v. C&T Pizza, Inc., 2015 IL App (1st) 131465 (CE Design I). In that appeal,

defendants appealed class certification in an action alleging violation of the TCPA, which makes

it unlawful to “ ‘use any telephone facsimile machine, computer, or other device to send, to a

telephone facsimile machine, an unsolicited advertisement.’ ” CE Design I, 2015 IL App (1st)

131465, ¶ 1 (quoting 47 U.S.C. § 227(b)(1)(C)). We will recite those facts that are relevant to the

disposition of this appeal.

¶4 Defendant C&T Pizza, doing business as Great Chicago Pizza, is a pizza delivery

restaurant in Schaumburg, Illinois. Id. ¶ 3. C&T Pizza is owned by defendants Joseph and Fran

Cianciolo. In March 2006, a fax broadcaster, Business to Business Solutions (B2B), 1 sent a fax

to defendant, advertising its services. Id. B2B is based in New York and run by Caroline

Abraham, who works with a Romanian company known as Macaw to send fax advertisements in

the United States. Id. Joseph responded to B2B’s advertisement and ultimately hired the

company to advertise his pizza business. Id.

¶5 B2B created a fax advertisement for the business after Joseph completed a document

from B2B with information and details about his pizza business. Id. ¶ 4. Defendant paid B2B

$268 to send out 5000 fax advertisements, and B2B planned on transmitting the fax

advertisements to zip codes and area codes near the pizza business. Id. On May 4, 2006, B2B

sent a fax of defendant’s advertisement to 2765 fax numbers, of which 1935 were successfully

1 B2B was not named as a party in the proceedings below and is not a party to this appeal.

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transmitted. Id. The next day, B2B sent a fax of defendant’s advertisement to 2729 fax numbers,

of which 1893 were successfully transmitted. Id. Plaintiff received faxes on both days. Id. ¶ 5.

¶6 Plaintiff is a small civil engineering firm based in the Chicago area that engages in

plaintiff class-action litigation involving the TCPA. Id. Plaintiff’s business address is located

approximately seven miles from the pizza restaurant’s business address.

¶7 In December 2006, plaintiff filed suit against C&T Pizza and Joseph and Fran Cianciolo

(collectively, defendants), seeking statutory damages for violations of the TCPA and the

Consumer Fraud Act and for conversion. Id. ¶ 6. Plaintiff also filed a motion for class

certification, which it amended twice.

¶8 The record indicates that, in January 2011, defendants filed a response to plaintiff’s

second amended motion for class certification. Attached to defendants’ response was Joseph

Cianciolo’s affidavit (2011 affidavit). In this affidavit, Joseph averred that “[w]hile a large

majority of the restaurant’s customers were located within two miles of the restaurant, all of the

restaurant’s customers were located within four miles of the restaurant.” He also averred that

defendant never delivered to anyone outside of four miles of the restaurant and “never delivered

to anyone in Rolling Meadows.” Finally, Joseph averred that he “instructed B2B to only send the

faxes to those businesses and individuals who resided within a two-mile radius of the restaurant.”

¶9 In April 2013, the circuit court granted plaintiff’s motion for class certification in a

memorandum opinion and order certifying the class. Id. Defendant filed a petition for leave to

appeal the class certification, which was granted. Id. ¶ 7.

¶ 10 Pertinent to the issues raised in the current appeal, one of defendants’ arguments in CE

Design I was that “plaintiff resided outside the geographical area which B2B was authorized to

transmit defendant’s fax advertisements because plaintiff was located more than five miles from

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the pizza restaurant.” Id. ¶ 18. Defendants further claimed that “any fax advertisements sent

beyond a two-mile radius of the pizza restaurant were not authorized [by them].” Id. However,

this court found that nothing in the record supported defendant’s position and that defendant

cited “nothing where Cianciolo instructed B2B to limit the geographic target area to a two-mile

radius of the pizza restaurant.” Id.

¶ 11 This court noted:

“The only evidence defendant points to in support of this claim is Cianciolo’s

recollection of a telephone conversation he had with someone at B2B, wherein they

discussed it was ‘supposed to be like a couple of miles from the business.’ This is hardly

a strict instruction to B2B to limit all faxes to exactly two miles. Moreover, this initial

conversation occurred on March 1, 2006, and Cianciolo did not finally agree to have B2B

transmit the fax advertisements on defendant’s behalf until two months later on May 3,

2006. In the meantime, Cianciolo exchanged numerous faxes with B2B and had a second

telephone conversation with B2B where he never again mentioned anything about

geography, let alone a strict two-mile limitation on B2B’s authority.” Id. ¶ 19.

¶ 12 This court further found that

“B2B did exactly what it agreed to do and transmitted defendant’s advertisements to the

fax numbers in its database that were as close to the zip code of defendant’s restaurant as

possible. *** There is no basis to contest liability under the TCPA for faxes that

defendant admits to have authorized B2B to send.” Id. ¶ 20.

¶ 13 This court further found that B2B had the apparent authority to send the unsolicited fax

advertisements and that the trial court did not abuse its discretion by finding that B2B sent

defendants’ faxes to plaintiff on defendants’ behalf where Joseph admitted that he engaged B2B

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to send the fax advertisements. Id.¶ 23. Moreover, the evidence indicated that B2B was acting

with apparent authority under the TCPA as defined by the Federal Communications Commission

(FCC), and we upheld the trial court’s decision to certify the class. Id. ¶¶ 23, 32.

¶ 14 Following the issuance of this court’s opinion in May 2015, the circuit court closed

discovery, and the parties filed cross-motions for summary judgment.

¶ 15 In support of their motion for summary judgment, defendants attached another affidavit

from Joseph (2017 affidavit). In the 2017 affidavit, Joseph restated his prior averments and

further averred that C&T never delivered to anyone in Rolling Meadows because the further

away the customer was from the restaurant, the more likely it was that the pizza would be cold

by the time it was delivered. Additionally, Joseph averred that (1) he was the individual who

responded to B2B’s fax solicitation that advertised its services, (2) he helped B2B create the

faxes that were sent out on behalf of the restaurant, (3) the faxes were developed primarily to

cater to existing customers of the restaurant, and (4) he instructed B2B to only send the faxes to

those businesses and individuals who resided within a two mile radius of the restaurant.

¶ 16 Plaintiff did not present a counter-affidavit in support of its motion for summary

judgment.

¶ 17 On February 13, 2018, the circuit court granted defendants’ motion for summary

judgment, dismissing all counts of plaintiff’s complaint.

¶ 18 In dismissing count I based upon the TCPA, the circuit court found that plaintiff’s

reliance on CE Design I as “the law of the case that B2B did not exceed its authority in sending

facsimiles outside of the two-mile radius” was a misapplication of the law rendered in that

interlocutory appeal. The circuit court reasoned that the law of the case doctrine applies if the

facts in a particular case remain the same. Citing Cruz v. Unilock Chicago, Inc., 383 Ill. App. 3d

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752, 764 (2008), the court noted that it may be necessary for a court to make certain findings

pertaining to the merits of the case in order to determine whether to certify the class, but those

determinations are not binding.

¶ 19 The circuit court further noted (1) that appellate review of the certification of a class is

limited to the narrow question of whether litigation should proceed as a class action-an issue

distinct from resolving any claim on its merits, (2) that rulings on class certification accept the

plaintiffs’ allegations as true, and (3) that inferences therefrom are drawn in favor of class

certification. However, the circuit court found that when the appellate court affirmed the class

certification in CE Design I, its rulings in that opinion did not become the law of the case

because that opinion “was not based on the fully developed record that is now before the Court.”

¶ 20 The circuit court noted that subsequent to this court’s interlocutory class certification in

CE Design I, issued in May 2015, additional evidence was submitted—namely, the 2017

affidavit. The circuit court further noted that Joseph’s averment that he only wanted the faxes to

be sent within two miles of the restaurant was a practical limitation in light of Joseph’s further

testimony that the large majority of their business was delivery and they limited their delivery

business to Schaumburg and Hoffman Estates for various reasons, most notably that the pizza

would usually get cold if it had to be delivered for long distances, and traffic in that area was

frequently heavy.

¶ 21 The circuit court rejected plaintiff’s argument that the 2017 affidavit was inconsistent

with his prior deposition testimony and should have been stricken. The court found that the 2017

affidavit expanded and reaffirmed Joseph’s prior deposition testimony and that, even if the 2017

affidavit was inconsistent because it included other aspects of his conversation with B2B that

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was not offered in his deposition, it was not contradictory on the seminal question of the

geographic limitation.

¶ 22 The circuit court concluded that

“[w]ith the benefit of Mr. Cianciolo’s affidavit (which the Appellate Court did not have

when it affirmed class certification), and with no contradictory evidence proffered by CE

Design, there is no genuine issue of material fact as to whether B2B exceeded its

authority when it sent fax advertisements beyond two miles from C&T’s pizza delivery

restaurant. As such, the faxes allegedly sent to CE Design were not ‘on behalf of’ C&T

within the meaning of TCPA.’ ”

The court then granted summary judgment in favor of defendants on count I.

¶ 23 As to counts II and III of plaintiff’s complaint, based upon conversion and the Consumer

Fraud Act, the court granted summary judgment in favor of defendants because plaintiff did not

produce any evidence that it suffered actual harm. Plaintiff does not raise any issues regarding

the dismissal of those counts in this appeal.

¶ 24 The summary judgment order also granted defendants’ request for attorney fees and

expenses incurred related to the deposition of nonparty Caroline Abraham. On two separate

occasions, defendant’s counsel flew to New York to attend Abraham’s deposition, and the

deposition did not proceed. In granting defendant’s request for reasonable attorney’s fees, the

circuit court noted “[w]hile CE Design’s counsel served notices of both of Ms. Abraham’s

scheduled depositions, he failed to cause a subpoena to issue for either of them.” Plaintiff does

not raise any issues regarding the circuit court’s grant of reasonable attorney fees and costs to

defendants in this appeal.

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¶ 25 On July 27, 2018, the circuit court entered the summary judgment order as final and

appealable. On August 20, 2018, plaintiff filed its timely notice of appeal.

¶ 26 II. ANALYSIS

¶ 27 On appeal, plaintiff contends that the circuit court erred when it (1) determined that this

court’s decision in CE Design I was not the law of the case and (2) granted summary judgment in

favor of defendants and denied plaintiff’s motion for summary judgment, finding that defendants

did not authorize B2B to send faxes more than two miles away from the restaurant.

¶ 28 A. Law-of-the-Case Doctrine

¶ 29 Plaintiff first contends that the circuit court erred when it determined that this court’s

decision in CE Design I was not the law of the case regarding whether B2B acted with

defendants’ authority in sending out the faxes. Plaintiff contends that that decision was the law of

the case because the record has not changed since this court affirmed class certification in its

May 2015 opinion. Plaintiff contends that the 2017 affidavit did not contain any new information

about Joseph’s instruction to B2B regarding the geographical area to cover with the faxes.

Plaintiff argues that the circuit court incorrectly rejected this court’s findings of fact set forth in

the interlocutory appeal because they were made in the context of class certification. Though the

interlocutory appeal was from a class certification order, plaintiff argues that the factual and

legal question for review was the validity of plaintiff’s claim in the face of defendants’ argument

that they did not authorize B2B to send faxes outside a strict two-mile radius from the restaurant.

¶ 30 In response, defendants contend that a ruling on class certification is not a ruling on the

merits of the case. Defendants assert that, in its class certification decision, the circuit court

expressly noted that it was not making any determinations on the merits of the case and that any

findings pertaining to the merits of the case in order to determine whether to certify the class,

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those determinations are not binding. Additionally, defendants argue that appellate courts are not

fact finders and, thus, made no findings on the merits because it would have been improper to do

so within the context of deciding class certification.

¶ 31 The law-of-the-case doctrine protects the parties’ settled expectations, ensures uniformity

of decisions, maintains consistency during the course of a single case, effectuates the proper

administration of justice, and brings litigation to an end. Radwill v. Manor Care of Westmont, IL,

LLC, 2013 IL App (2d) 120957, ¶ 8.

¶ 32 The law-of-the-case doctrine limits relitigation of a previously-decided issue in the same

case and applies not only to the court’s explicit decisions, but also those issues decided by

necessary implication. Rommel v. Illinois State Toll Highway Authority, 2013 IL App (2d)

120273, ¶ 15. The doctrine applies to questions of law on remand to the trial court, as well as on

subsequent appeals to the appellate court. Id. There are two exceptions to the law-of-the-case

doctrine: (1) when, after a reviewing court’s original decision, a higher court makes a contrary

ruling on the same issue and (2) when a reviewing court finds that its prior decision was palpably

erroneous. Id. ¶ 17. Moreover, a ruling will not be binding in a subsequent stage of litigation

when different issues are involved, different parties are involved, or the underlying facts have

changed. American Service Insurance Co. v. China Ocean Shipping Co. (Americas), Inc., 2014

IL App (1st) 121895, ¶ 17. Application of the law-of-the-case doctrine is a question of law, and

our review is de novo. Rommel, 2013 IL App (2d) 120273, ¶ 14.

¶ 33 Here, this court reviewed the circuit court’s grant of class certification in CE Design I.

Because that decision was a decision on the merits of the interlocutory order only, it was not a

decision on the merits and did not have a preclusive effect on other issues that could be raised

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later on direct appeal. Rosolowski v. Clark Refining & Marketing, 383 Ill. App. 3d 420, 428

(2008).

¶ 34 A ruling on class certification is not a ruling on the merits of the case. See Chultem v.

Ticor Title Insurance Co., 2015 IL App (1st) 140808, ¶¶ 47-50. Decisions on appeal related to

class certification are typically not decided on the merits but are limited in scope to whether class

certification is appropriate. See Chultem, 2015 IL App (1st) 140808, ¶¶ 47-50.

¶ 35 In CE Design I, as noted previously, this court only addressed the issue of whether the

circuit court properly certified the class. At that time, we rejected defendants’ arguments that

plaintiff resided outside the geographical area which B2B was authorized to transmit the fax

advertisements as it related to certification of the class. In doing so, we noted that there was

nothing in the record to support this claim except Joseph’s statement in his deposition.

¶ 36 After remand, the case continued in the trial court, including additional discovery. Both

parties subsequently filed cross-motions for summary judgment. Joseph’s 2017 affidavit was

attached to defendants’ motion and provided additional information regarding B2B’s authority to

send faxes beyond a two-mile radius away from the restaurant.

¶ 37 While defendants raised several issues in the interlocutory appeal, our final decision only

affected the merits of the class certification and not the ultimate issue in controversy, namely

whether defendants authorized B2B to send faxes outside of a two-mile radius of the restaurant

and violated the TCPA. Plaintiff’s contention is unreasonable and a misapplication of the law

pertaining to interlocutory appeals and the law-of-the-case doctrine. We find that the circuit court

properly concluded that our decision in CE Design I was not the law of the case with regards to

the merits of the underlying controversy.

¶ 38 B. Summary Judgment

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¶ 39 Plaintiff next contends that the circuit court erred when it granted defendants’ motion for

summary judgment and denied its summary judgment motion, finding that defendants did not

authorize B2B to send faxes more than two miles away from defendant’s restaurant under the

TCPA.

¶ 40 Summary judgment is appropriate “if the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material fact and

that the moving party is entitled to a judgment as a matter of law.” (Internal quotation marks

omitted.) Irwin Industrial Tool Co. v. Department of Revenue, 238 Ill. 2d 332, 339-40 (2010);

735 ILCS 5/2-1005(c) (West 2018). The purpose of summary judgment is to determine whether

there are triable issues of fact. Hartz Construction Co. v. Village of Western Springs, 2012 IL

App (1st) 103108, ¶ 23. We review the circuit court’s decision to grant summary judgment

de novo. Loncarevic & Associates, Inc. v. Stanley Foam Corp., 2017 IL App (1st) 150690, ¶ 23;

Evans v. Brown, 399 Ill. App. 3d 238, 244 (2010).

¶ 41 In reviewing a circuit court’s ruling on a motion for summary judgment, the appellate

court examines the record anew to determine whether a material question of fact exists. CE

Design, Ltd. v. Speedway Crane, LLC, 2015 IL App (1st) 132572, ¶ 20; Coole v. Central Area

Recycling, 384 Ill. App. 3d 390, 396 (2008).

¶ 42 The TCPA provides in relevant part: “It 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

*** to use any telephone facsimile machine, computer, or other device to send, to a telephone

facsimile machine, an unsolicited advertisement.” 47 U.S.C. § 227(b)(1)(C). The plain language

of the TCPA assigns direct liability to “any person” who sends an unsolicited fax advertisement.

Id.; Uesco Industries, Inc. v. Poolman of Wisconsin, Inc., 2013 IL App (1st) 112566, ¶ 54.

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¶ 43 Although the Act does not explicitly assign vicarious liability, the United States Supreme

Court has held that, “when Congress creates a tort action, it legislates against a legal background

of ordinary tort-related vicarious liability rules and consequently intends its legislation to

incorporate those rules.” Meyer v. Holley, 537 U.S. 280, 285 (2003); Uesco Industries, 2013 IL

App (1st) 112566, ¶ 54. Section 217 of the TCPA, titled “Agents’ acts and omissions; liability of

carrier,” codifies the common law respondeat superior doctrine states in pertinent part:

“In construing and enforcing the provisions of this chapter, the act, omission, or

failure of any officer, agent, or other person acting for or employed by any common

carrier or user, acting within the scope of his employment, shall in every case be also

deemed to be the act, omission, or failure of such carrier or user as well as that of the

person.” (Emphasis added.) 47 U.S.C. § 217 (2006); Uesco Industries, 2013 IL App (1st)

112566, ¶ 54.

¶ 44 “There is nothing in the plain language of the Act nor its legislative history suggesting

Congress intended to impose liability on a party that did not send an unsolicited fax or authorize

a third party to send an unsolicited fax on its behalf.” Uesco Industries, 2013 IL App (1st)

112566, ¶ 55. The FCC implemented this prohibition by promulgating 47 C.F.R. § 64.1200(a)(3)

(2008), which defines a “sender” as “the person or entity on whose behalf a facsimile unsolicited

advertisement is sent or whose goods or services are advertised or promoted in the unsolicited

advertisement” (47 C.F.R. § 64.1200(f)(8) (2008)).Thus, the FCC has also ruled that the Act

incorporates vicarious liability. Uesco Industries, 2013 IL App (1st) 112566, ¶55.

¶ 45 In this case, it is undisputed that plaintiff received two faxes from B2B, advertising the

pizza restaurant. It is also undisputed that defendants authorized B2B to send faxes on its behalf.

The parties dispute, however, whether B2B had authority to send the faxes on defendants’ behalf

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outside of a two-mile radius, thereby imputing vicarious liability to defendant. More specifically,

the parties dispute whether B2B had the authority to send the two faxes to plaintiff, who was

located more than seven miles away from the restaurant.

¶ 46 We note that the 2017 affidavit attached to defendants’ motion for summary judgment

was uncontested as plaintiff failed to file a counter-affidavit. “[F]acts contained in an affidavit in

support of a motion for summary judgment which are not contradicted by counteraffidavit are

admitted and must be taken as true for purposes of the motion.” Purtill v. Hess, 111 Ill. 2d 229,

241 (1986). “If a party moving for summary judgment supplies facts which, if not contradicted,

would entitle such party to a judgment as a matter of law, the opposing party cannot rely on his

pleadings alone to raise issues of material fact.” Id. at 240-41.

¶ 47 Here, Joseph’s 2017 affidavit averred that he did not authorize B2B to send faxes outside

of a two-mile radius. Taking this allegation as true, we find that B2B did not have the authority

to send the faxes to plaintiff on defendants’ behalf. Because plaintiff failed to file a counter-

affidavit, there was no issue of genuine material fact as to whether Joseph authorized B2B to

send the faxes beyond two miles. Thus, defendants did not violate the TCPA, and the trial court

properly granted summary judgment in their favor.

¶ 48 III. CONCLUSION

¶ 49 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 50 Affirmed.

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No. 1-18-1795

Decision Under Review: Appeal from the Circuit Court of Cook County, No. 06-CH- 27638; the Hon. Sanjay Tailor, Judge, presiding.

Attorneys Phillip A. Bock, Robert M. Hatch, and Tod A. Lewis, of Bock, for Hatch, Lewis & Oppenheim LLC, of Chicago, for appellant. Appellant:

Attorneys James K. Borcia, of Tressler LLP, of Chicago, for appellees. for Appellee:

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