First National Collection Bureau, Inc. v. WalkerFirst National Collection Bureau, Inc. v. Walker
OPINION
Opinion By
Appellee Daniele Walker filed suit against appellant First National Collection Bureau, Inc. (“FNCB”) alleging automated debt collection calls were made to her cell phone number in violation of the federal Telephone Consumer Protection Act (“TCPA”) and section 35.47(f) of the Texas Business and Commerce Code, which was in effect at that time.
See
I. FACTUAL AND PROCEDURAL BACKGROUND
FNCB, a third party debt collector, assists other entities in collecting payment on delinquent accounts. In January 2008, FNCB began collection efforts on an account owed by an individual who is not a party to this litigation. However, the telephone number that “came with” that account had been reassigned to Walker’s cell phone. During a period of approximately six months, FNCB and two of its vendors, Global Connect and TCN, made multiple calls to Walker’s cell phone number in connection with attempts to collect that debt.
Among the documents admitted into evidence at trial were business records of FNCB. Also, Walker and Scott Carroll, FNCB’s vice president of operations and business development, testified.
At the charge conference held after the presentation of evidence, the trial court refused all jury questions and instructions submitted by FNCB and overruled FNCB’s objections to the charge. 3 The charge of the court submitted to the jury contained the following three questions:
QUESTION NO. 1:
Were calls made to [the phone number in question] using an automatic telephone dialing system or an artificial voice or a prerecorded voice without the prior express consent of the called party?
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QUESTION NO. 2:
How many calls were made by [FNCB] or on its behalf to [the phone number in question] using an automatic telephone dialing system or an artificial voice or a prerecorded voice?
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QUESTION NO. 3:
Did [FNCB] willfully and knowingly make or cause to be made calls to [the phone number in question] when an automatic telephone dialing system or an artificial voice or a prerecorded voice was used?
“Willfully and knowingly” means that [FNCB] knew or should have known that it was violating the federal [TCPA] when it called or caused to be called [thephone number in question]. A finding that [FNCB] acted “willfully or knowingly” does not require a finding of bad faith, but only that [FNCB] had reason to know, or should have known, that its conduct would violate federal law.
The jury answered “yes” to questions number one and number three. The jury’s response to question number two was “98.”
Then, additional argument was presented by the parties and the following additional question was submitted to the jury:
What sum of money, if any, in addition to statutory damages should be awarded against [FNCB] because [FNCB]’s conduct was committed willfully and knowingly?
Please award an additional dollar amount per telephone call made. You may award between $0 and $1000 in additional damages per telephone call. Answer in dollars and cents.
The jury answered “$1000.00 per telephone call.”
FNCB filed motions for judgment notwithstanding the verdict and new trial. At a hearing on those motions, FNCB argued in part that the jury’s finding as to whether additional damages should be awarded based on “willful and knowing” conduct of FNCB was immaterial because only the trial court had authority to make that decision. The trial court, over objection by Walker and without a jury present, “accepted” additional testimony offered by FNCB regarding the determination of additional damages. The trial court declined to rule at that time as to whether such additional damages were to be determined at the trial court’s discretion or by the jury. After taking the matter under advisement, the trial judge proceeded to decide the issues as to additional damages and a final judgment was rendered that ordered that Walker recover $49,000 in statutory damages pursuant to the TCPA and “$98,000 in damages pursuant to the [TCPA] for willful and knowing violations,” plus court costs and interest. Additionally, the trial court denied FNCB’s motions for judgment notwithstanding the verdict and new trial.
FNCB filed (1) a motion to modify, correct, or reform the judgment and (2) a request for findings of fact and conclusions of law respecting,
inter alia,
“[t]hose portions of the case decided by the court.” Then, Walker filed proposed findings of fact and conclusions of law pertaining to the additional damages awarded by the trial court for “willful and knowing” violations of the TCPA. FNCB filed a request for additional findings of fact and conclusions of law as to whether FNCB acted “knowingly or intentionally” pursuant to
A. Standard of Review
Statutory construction presents a question of law that we review de novo.
See, e.g., City of DeSoto v. White,
In a legal sufficiency challenge respecting an issue on which the opposing party had the burden of proof, we review the evidence in a light that tends to support the finding of the disputed facts and disregard all evidence and inferences to the contrary.
Lee Lewis Constr., Inc. v. Harrison,
When reviewing the factual sufficiency of the evidence, we examine all the evidence and set aside a finding only if it is so contrary to the evidence as to be clearly wrong and unjust.
Cameron v. Cameron,
B. Applicable Law
1. Telephone Consumer Protection Act
The TCPA provides in relevant part that it shall be unlawful for any person within the United States “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 ... to any telephone number assigned to a ... cellular telephone service.”
Subsection (f) of the TCPA, titled “Effect on State Law,” provides in relevant part that, with certain exceptions not at
2.Texas Business and Commerce Code_
According to
A person who receives a communication that violates47 U.S.C. Section 227 , a regulation adopted under that provision, or this section may bring an action against the person who originates the communication in a court of this state for an injunction, damages in the amount provided by this subsection, or both. A plaintiff prevailing in an action for damages under this subsection is entitled to the greater of $500 for each violation or the person’s actual damages, except that the court may increase the amount of the award to not more than the greater of $1,500 for each violation or three times the person’s actual damages if the court finds that the defendant committed the violation knowingly or intentionally.
3.Supremacy Clause
According to the Supremacy Clause of the United States Constitution, “[t]his Constitution, and the Laws of the United States ... shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.”
[T]he Constitution and laws passed pursuant to it are as much laws in the State as laws passed by the state legislature. The Supremacy Clause makes those laws “the supreme Law of the Land,” and charges state courts with a coordinate responsibility to enforce that law according to their regular modes of procedure.
Howlett v. Rose,
4.Statutory Construction
In matters of statutory construction, courts must give effect to the unambiguously expressed intent of the legislature.
See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
State courts have the authority to render binding decisions based on their interpretation of federal law unless a federal statute provides for exclusive federal jurisdiction.
See ASARCO, Inc. v. Kadish,
5. Preservation of Error
Generally, a complaint not presented to the trial court by a timely, specific objection is not preserved for appeal.
See
With respect to jury charge error, the Texas Supreme Court has stated “[t]here should be but one test for determining if a party has preserved error in the jury charge, and that is whether the party made the trial court aware of the complaint, timely and plainly, and obtained a ruling.”
State Dep’t of Highways & Pub. Transp. v. Payne,
To preserve error for a legal sufficiency issue as to a jury trial, “the appellant must raise the issue through one of the following: (1) a motion for directed verdict; (2) a motion for judgment notwithstanding the verdict; (3) an objection to the submission of the question to the jury; (4) a motion to disregard the jury’s answer to a vital fact question; or (5) a motion for new trial.”
Martin v. Martin,
C. Analysis
1. Applicability of TCPA and
We begin with subpart (a) of FNCB’s first issue and subpart (a) of FNCB’s second issue, which we address together. In those two points, FNCB contends (1) “Texas law does not apply the [TCPA] to debt collection activities” and (2) “[t]he TCPA does not apply to debt collection calls.” Walker asserts, in part, that FNCB has failed to preserve these points for appeal because FNCB made no objections during the charge conference challenging the applicability of the TCPA and
The record shows FNCB made no objection on such grounds during the charge conference. In its motions for new trial and to modify, correct, or reform the judgment, FNCB challenged the application of both statutes to debt collection calls. However, those challenges came too late.
See
2. Limitation of TCPA Action to Calls “Received”
In subpart (b) of its first issue, FNCB contends the trial court “erred by not asking the jury how many TCPA-violative calls were ‘received’ by [Walker].” According to FNCB, states that choose to enforce the TCPA “may establish more or less restrictive provisions.” FNCB argues the language of
Walker responds that “[a] state cannot amend a federal statute, and Texas did not purport to do so.” Walker asserts (1) if a conflict exists between the TCPA and state enabling legislation, federal law controls pursuant to the Supremacy Clause and (2) in any event, the language of the federal and Texas statutes can be harmonized and thus there is no conflict. Additionally, Walker contends FNCB has not preserved this issue for review.
As to preservation of this issue, the record shows that in the trial court, FNCB submitted proposed jury charge questions asking the jury whether Walker “received” calls made by FNCB and how many such calls were “received” by Walker. The trial court refused those questions. During the charge conference, FNCB objected to question number one of the charge of the court because “the Court
FNCB asserts several arguments respecting this issue, and we consider those arguments in turn. First, we address FNCB’s underlying contention that states that choose to enforce the TCPA “may establish more or less restrictive provisions,” i.e., Texas was authorized to enact legislation that provides violations include only communications that are “received.” In asserting that contention, FNCB relies primarily on
Chair King. See
Next, we address FNCB’s assertion that state laws that affect the application of the TCPA, including
Congress passed the TCPA in order to help States regulate telemarketing, but Congress hinged the applicability of the statute on the state’s acceptance of the law. Texas has decided to “opt in” to the statute’s protection and, by the words of the legislature, has explained to what extent it has opted in. According to the very words of the TCPA, Texas has reserved a right to expand or restrict the statute’s requirements under its police power. Texas has decided to restrict the application of the statute to communications actually received by plaintiffs. To find otherwise flies in the face of existing precedent and is contrary to state law.
(emphasis original).
FNCB’s argument is contrary to the language of subsection (e)(1).
See id.
That subsection makes it clear that a state that “opts in” is not free “to expand or restrict the statute’s requirements” as the state wishes. Subsection (e)(1) specifies what is
not
preempted by federal law, namely “more restrictive intrastate requirements or regulations.”
Id.
FNCB does not address whether a provision that restricts the private right of action to calls “received” is “more restrictive,” as described in subsection (e)(1), than the federal law that denominates an actionable call as one “made.” FNCB simply refers to
We conclude the analysis offered by FNCB does indeed demonstrate some likelihood of reduced damage exposure to a defendant where a calls “received” standard is applied. However, using that analysis, it follows that the “narrowed ... scope” of
Finally, we address FNCB’s contention that this Court and others have limited TCPA violations to communications “received.” In support of that contention, FNCB cites
Intercontinental Hotels Corp. v. Girards,
Intercontinental Hotels Corp.
involved a fax recipient who brought a purported class action against defendant Intercontinental Hotels Corporation and related entities (“Intercontinental”) for sending unsolicited faxes in violation of the TCPA during the year 2000.
Intercontinental Hotels Corp.,
Now, as to
American Blastfax,
as we described above in part, the court found the defendants sent 1.25 million unsolicited fax advertisements per month during the relevant time frame and “75% of these faxes actually were received.”
Am. Blastfax,
FNCB does not assert, and the record does not show, that the calls at issue were not “made” to Walker.
See
3. Vicarious Liability of FNCB for Calls Made by Vendors
In subpart (c) of its first issue and sub-part (d) of its second issue, FNCB contends (1) the trial court erroneously held FNCB vicariously liable under Texas law for calls “caused to be made” by it or made “on its behalf’ and (2) the TCPA does not impose automatic vicarious liability for the actions of independent contractors.
Walker responds (1) the record contains ample evidence to support a common law agency relationship between FNCB and its vendors and (2) “every court considering the issue has rejected [FNCB’s] position that a party cannot be held liable [under the TCPA] for the acts of independent contractors hired to make calls on the party’s behalf.” Additionally, Walker asserts FNCB failed to preserve error as to this issue. As to this last assertion, we agree.
The record shows that FNCB’s proposed jury questions and instructions, which were refused by the trial court, did not include any questions or instructions pertaining to vicarious liability. During the charge conference, the trial court overruled objections by FNCB that (1) question number two of the charge of the court “should be altered such that it provides a blank to be filled in by the juror for each of the potential calling parties” because that would be “a more proper version of the question” and (2) question number three should “not be submitted at all” because the evidence was insufficient “to support a jury question on whether or not [FNCB] willfully and knowingly made or caused to be made calls in knowing that it violated the [TCPA].” In its post-trial motions, FNCB asserted (1) the trial court “erred in the charge submission by submitting ‘on behalf or caused to be made’ language in a couple of questions” and (2) “[t]he judgment entered by the court is based improperly on an incorrect submission.” In its brief in this Court, FNCB asserts that questions number two and number three of the jury charge “demonstrate that the [trial] court assumed FNCB could be held automatically liable for the actions of third parties.”
The record does not show the legal point FNCB asserts now was raised by objection in the trial court. FNCB did not specifically object to the phrase “on its behalf’ in question number two of the charge of the court or the phrase “cause to be made” in question number three. In objecting to question number two, FNCB did not state why its requested version would be “more
Further, the record shows Carroll testified on cross-examination, without objection, that (1) FNCB requested that Global Connect and TCN make telephone calls “on behalf’ of FNCB using an automatic telephone dialing system and/or artificial or prerecorded voices; (2) FNCB expected Global Connect and TCN to make those telephone calls at FNCB’s direction; (3) on a daily basis, FNCB decided which accounts to send to Global Connect and TCN for that particular day and supplied the vendors with the data files for those accounts; (4) the calls were made by the vendors on the same day the data files were supplied; (5) FNCB instructed Global Connect and TCN not to make more than two calls per day to any one of the telephone numbers; (6) the vendors left prerecorded messages providing FNCB’s telephone number and/or stating that the calls were from FNCB; and (7) if a “live person” picked up the phone, the calling equipment used by Global Connect and TCN transferred the calls to FNCB.
The Texas Supreme Court has stated “[tjhere should be but one test for determining if a party has preserved error in the jury charge, and that is whether the party made the trial court aware of the complaint, timely and plainly, and obtained a ruling.”
Payne,
4. Standard for Determining Additional Damages
In subpart (d) of its first issue, FNCB contends the trial court “used the wrong standard for finding additional damages under Texas law.” According to FNCB, rather than applying the standard in
Walker asserts (1) “there exists no basis for state trial eourt[s] to apply only a portion of the federal statute, and ignore the rest” and (2) regardless, FNCB could not have been harmed by application of the federal standard because a “knowing” violation is set out in both statutes and, in the alternative, the trial court found FNCB committed violations “willfully or knowingly.” Additionally, Walker contends FNCB has waived this claim of error.
Generally, a complaint not presented to the trial court by a timely, specific objection is not preserved for appeal.
See
5. Use of “Automatic Telephone Dialing System” or “Artificial or Prerecorded Voice”
Next, we address together subparts (b) and (c) of FNCB’s second issue. In sub-part (b) of that issue, FNCB contends “[o]nly artificial or prerecorded voice messages can violate
Walker responds that the evidence is sufficient to support the jury’s verdict. Further, Walker asserts these issue were not raised below and therefore were waived.
In its motion for new trial, FNCB contended “there is insufficient evidence to support the findings of the jury,” challenged the sufficiency of the evidence to show the use of “autodialers,” and asserted there was no evidence of more than four calls using prerecorded voices. Accordingly, we conclude FNCB preserved these issues for review.
See Deatley,
Even assuming without deciding that, as argued by FNCB, only artificial or prerecorded voice messages can violate
Q.Isn’t it true that FNCB requested that TCN make telephone calls on behalf of FNCB?
A. It’s true that we — we outsourced those calls for them to make on our behalf; yes.
Q. Okay. And isn’t it true that FNCB asked it to do so using an automatic telephone dialing system?
A. Their system, yes.
Q. Correct. And isn’t it true that FNCB asked that TCN do so using prerecorded messages and/or artificial or prerecorded voices?
A. Yes.
Q. And all the questions I just asked you about TCN, is that also true with Global Connect?
A. Yes, sir.
Additionally, with respect to FNCB’s records of the calls made to Walker’s cell phone number, Carroll testified on cross-examination as follows:
Q. And all these calls are made on FNCB’s behalf, is it not?
A. Yes.
Q. In fact, there was no really — there’s no human — and this is stating theobvious — there was no human making any of these telephone calls?
A. Correct.
On this record, we conclude there is more than a scintilla of evidence to support the jury’s finding that every call made to Walker used an artificial or prerecorded voice.
See Formosa Plastics Carp. USA,
6. Statutory Damages Per Violation
FNCB asserts in its third issue that “[t]he [TCPA] itself and the Act as applied through Texas law permits a finding of ‘up to $500’ in statutory damages per violation.” According to FNCB, the trial court erred by dénying FNCB’s request to allow the jury “to determine what amount, if any, to give [Walker] for receiving the violative calls, up to $500.”
Walker asserts the language of subsection (b)(3)(B) does not include the qualification “up to.” According to Walker, “[t]he law requires that this Court limit the statute to its plain language.” Further, Walker contends this issue was not preserved by FNCB.
The record shows FNCB’s proposed jury submissions included a question in which the jury was instructed that it could award Walker “up to $500.00 in damages” for each violative call. That question was among those refused by the trial court. Further, because the damage issue was ultimately referred to the trial judge and was a “matter of law” to be determined by the trial court, FNCB asserted in its post-trial motions that the statutory damage provisions at issue should be interpreted to allow for recovery of initial damages of “up to” $500 per violation. Accordingly, we conclude FNCB has preserved this issue for this Court’s review.
See
In its briefing on this issue, FNCB addresses both the TCPA and
Now, in order to determine whether the TCPA permits a finding of “up to $500,” we consider the statute itself and the case law. Subsection (b)(3)(B) of the TCPA provides in relevant part that “[a] person or entity may, if otherwise permitted by the laws or rules of a court of a State, bring in an appropriate court of that State ... 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.”
However, we cannot agree with FNCB that
American Blastfax
stands for the proposition that statutory damages under the TCPA subsection at issue here are discretionary. The section of the TCPA addressed by the federal court in
American Blastfax
is not the same section applied in this case.
American Blastfax
concerned interpretation of TCPA subsection (f)(1), which provides that “the State” may bring “an action to recover for actual monetary loss or receive $500 in damages for each violation.”
We conclude the trial court did not err by denying FNCB’s request that the jury be instructed that it could award “up to” $500 in damages per violation in this case. We decide FNCB’s third issue against it.
7. “Clear and Convincing” Burden of Proof as to Willful or Knowing Conduct
Finally, we address FNCB’s fourth and fifth issues together because FNCB contends, inter alia, in both issues that the burden of proof for the predicate to additional damages, “willfully or knowingly,” is clear and convincing evidence.
In its fourth issue, FNCB contends “[a] finding that a party willfully or knowingly violated the [TCPA] should be proven by clear and convincing evidence.” According to FNCB, section 41.003 of the Texas Civil Practice and Remedies Code requires such a standard “for finding aggravated conduct.”
See
Walker asserts “[t]he trial court applied the correct burden of proof in finding that [FNCB] -willfully or knowingly.violated the
FNCB’s requested jury submissions included the following question: “Do you find by clear and convincing evidence that [FNCB] knowingly and willfully made calls using automated dialer and a prerecorded or artificial voice to [Walker]?” The trial court refused that question. However, the record shows the issue of additional damages was decided by the trial court at FNCB’s request. FNCB did not assert during or after trial that a clear and convincing standard should be applied by the trial court in deciding that issue. Further, although FNCB filed a request for additional findings of fact and conclusions of law respecting the additional damages, FNCB did not request any finding or conclusion as to the burden of proof applied. The record does not show what standard the trial court used in finding such damages were warranted.
See In re D.E.W.,
However, in its fifth issue, FNCB asserts a factual sufficiency challenge as to “[t]he fact-finder’s determination that [FNCB] willfully or knowingly violated the [TCPA]” and contends “[t]he evidence before the court does not amount to clear and convincing evidence that FNCB knew of the TCPA’s prohibitions, knew they applied to debt collection, and knew it did not have permission to call Walker.” Because the applicability of a “clear and convincing” burden of proof is determinative as to the resolution of FNCB’s fifth issue, we address that burden of proof issue.
FNCB contends the TCPA and
The TCPA contains no requirement that additional damages pursuant to subsection (b)(3) must be proven by a “clear and convincing” standard.
See
We conclude the “willful or knowing” conduct of FNCB was not required to be proven by clear and convincing evidence. FNCB’s fifth issue challenges only whether a “clear and convincing” burden of proof was met as to willful and knowing conduct by FNCB, and does not challenge the factual sufficiency of the evidence to meet any other burden of proof. We decide against FNCB on its fourth and fifth issues.
III. CONCLUSION
Having decided against FNCB on all five of its issues, 8 we affirm the trial court’s judgment.
Notes
.
See
Act of May 23, 1989, 71st Leg., R.S., ch. 783, § 1, 1989 Tex. Gen. Laws 3469, 3469, amended by Act of May 26, 1999, 76th Leg., R.S., ch. 635, § 1, 1999 Tex. Gen. Laws 3203, 3203, amended by Act of May 24, 2001, 77th Leg., R.S., ch. 1429, § 2, 2001 Tex. Gen. Laws 5102, 5108-09, repealed by Act of May 15, 2007, 80th Leg., R.S., ch. 885, § 2.47(1), 2007 Tex. Gen. Laws 1905, 2082 (eff. Apr. 1, 2009) (now codified at
. The first and second of FNCB's five issues contain four subparts each, with the subparts labeled (a)-(d).
. Objections to the charge of the court by counsel for FNCB included, in relevant part, the following:
I think [Question Number 1] should follow the Texas v. Blassfax case. I also believe the Court should submit a question about whether or not Ms. Walker received the phone calls, and that is Question Number 2, as well as Question Number 3.
[[Image here]]
Then I believe if the Court is going to submit the Charge in the format that is provided to us, then Question Number 2 should be altered such that it provides a blank to be filled in by the juror for each of the potential calling parties, that specifically being [FNCB] [,] TCN and Global Connect, and I believe that that would be a more proper version of the question if the Court were to submit a question in the format that it is.
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... And additionally, finally, Your Honor, I would ask that Question Number 3 not be submitted at all. I don't believe there’s been sufficient evidence to support a jury question on whether or not [FNCB] willfully and knowingly made or caused to be made calls in knowing that it violated the [TCPA],
Mr. Carroll's testimony from the stand was simply that he had heard sometime in 2008 that there may have been some people in the legal system who were trying to extend that statute to apply to collections. I also believe that based on the evidence before the Court they had no knowledge that Ms. Walker — that they were intentionally violating the act with regard to calling Ms. Walker, and I don't think it's appropriate to submit Question Number 3 in a way that there's insufficient evidence to do so.
. The trial court's findings of fact and conclusions of law provided in relevant part:
Findings of Fact
1. On the basis of all the evidence presented, the court finds that [FNCB] willfully or knowingly violatedSection 227(b) of the federal [TCPA],
2. As a result of FNCB's willful or knowing violations, $1,000.00 in additional damages for each of the 98 phone calls (as found by the jury) is appropriate considering all the evidence heard by the court.
3. FNCB acted with reckless indifference when calling the Plaintiff's telephone number.
4. FNCB had reason to know, or should have known, that its conduct would violate the [TCPA],
Conclusions of Law
1. "Willfully or knowingly,” for purposes of the federal [TCPA], means that FNCB knew or should have known that it was violating the federal [TCPA] when it called the Plaintiff's phone number; a finding that FNCB acted willfully or knowingly does not require finding of bad faith, but only that FNCB had reason to know, or should have known, that its conduct would violate federal law.
. As described above,
.
Chair King
involved an action brought by recipients of unsolicited telecopied or "fax” advertisements against the senders of those advertisements.
. FNCB discusses several federal and state cases from New York in which courts in that state concluded state law governs whether a class action can lie under the TCPA.
See Holster v. Gatco, Inc.,
. In the initial portion of its first issue, FNCB asserts, "The trial court committed reversible error by refusing to apply Texas law.” To the extent FNCB intends that statement to constitute an issue separate from the subparts that follow that statement, such issue was not raised in the trial court. Therefore, such issue presents nothing for this Court's review.
See