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Gorss Motels Inc. v. Safemark Systems LP

United States District Court, M.D. Florida, Orlando Division

April 5, 2018

GORSS MOTELS, INC. and E & G, INC., Plaintiffs,



         This matter comes before the Court on the Motion for Class Certification (Doc. 60) filed by the Plaintiffs, Gorss Motels Inc. (henceforth, “Gorss”) and E & G, Inc. (“E&G); the response in opposition (Doc. 70) filed by the Defendant, Safemark Systems, LP (“Safemark”); and the reply (Doc. 78) filed by the Plaintiffs.

         I. Introduction

         Gorss and E&G are, respectively, former and current franchisees of Wyndham Hotel Group (“Wyndham”). They bring this putative class action against Safemark regarding faxes sent by or on behalf of Safemark in violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227. (See Doc. 43).

         II. Background

         To fully appreciate the facts of this case, it is helpful to understand the nature of the relationship between the Plaintiffs, the Defendant, and non-party Wyndham.

         A. Wyndham Hotel Group

         WHG is one of the world's largest hotel franchise companies. (Doc. 70-6, ¶ 3). It owns numerous franchising subsidiaries in the lodging industry, including Super 8 Worldwide, Inc. (“SWI”) and Wingate Inns International, Inc. (“WII”), which offer and support lodging franchises under the Super 8 and Wingate guest lodging franchise systems, respectively. (Id. ¶ 6; Doc. 70-4, ¶2).

         B. Plaintiffs Gorss and E&G

         In 1988, Gorss entered into a franchise agreement with Super 8 Motels, Inc. (now SWI) for the operation of a Super 8 motel for an initial term of twenty years. (See Doc. 70-6, ¶ 7; see id. at 12-38) (the “1988 Franchise Agreement”). By amendment dated March 11, 2009, the parties extended the term of the 1988 Franchise Agreement through August 15, 2014. (Id. ¶ 7). Upon the expiration of the 1988 Franchise Agreement, Gorss entered into another franchise agreement with SWI on September 10, 2014, for the continued operation of its Super 8 motel for an additional twenty years. (Doc. 70-7, ¶ 5; Doc. 70-6, pp. 41-87 (the “Gorss Franchise Agreement”)). The Gorss Franchise Agreement terminated in 2016 when Gorss sold its Super 8 motel. (Doc. 70-6, ¶ 21).

         In 1997, E&G entered into a franchise agreement with Hotel Franchising Limited Partnership (now WII) for the operation of a Wingate hotel. (Doc. 70-7, ¶ 9; Doc. 70-6, pp. 200- 239 (“E&G Franchise Agreement”)). The term of the E&G Franchise Agreement extends through July 8, 2018. (Doc.70-6, ¶ 26).

         In executing their respective franchise agreements, Plaintiffs agreed to operate their lodging facilities in accordance with certain standards (henceforth, the “System Standards”) established by their franchisors - SWI and WII. (Doc. 70-6, pp. 42-47; 200-205). To comply with the System Standards, Plaintiffs agreed to, inter alia, purchase certain proprietary items from Wyndham's “Approved Suppliers.” (See Id. at 46, 204). Plaintiffs also agreed that their franchisors and their franchisors' affiliates could offer optional assistance with regard to purchasing items for their motels. (See id. at 50, 207).

         C. Wyndham's Approved Supplier Program

         To assist its franchisees with their efforts to obtain services and items for their motels, Wyndham developed an “Approved Supplier program.” (Doc. 70-7, ¶ 17, 18; Doc. 70-4, ¶¶ 3-4). The Approved Supplier program is offered through a Wyndham affiliate, Worldwide Sourcing Solutions, Inc. (“Worldwide Sourcing”), which identifies and approves third-party suppliers and service providers. (Doc. 70-4, ¶ 4). Vendors that meet Worldwide Sourcing's criteria are referred to as “Approved Suppliers.” (Id.). Wyndham and Worldwide Sourcing identify Approved Suppliers to franchisees by, among other things, publishing a supplier directory and by allowing them to attend and set up displays at conferences for franchisees.

         D. Defendant Safemark

         Safemark is a Florida corporation that sells and leases safes to hotels and motels. (Doc. 70-3 ¶ 3). Safemark has been an Approved Supplier since 2002. (Doc. 70-4, ¶ 15). In March 2012, Safemark entered into a ‘Second Amendment to Vendor Direct Supplier Agreement' with Worldwide Sourcing wherein Safemark agreed to supply in-room safes to Wyndham franchisees. (Id.).

         Worldwide Sourcing authorized Safemark to communicate with franchisees regarding the products offered as part of the Approved Supplier program. (Doc. 70-4, ¶ 16). Worldwide Sourcing regularly provides Safemark with a database that contains contact information for Wyndham's franchisees. (Doc. 70-3, ¶¶ 10, 11). Worldwide Sourcing also provides Safemark, and other Approved Suppliers, the opportunity to participate in marketing programs that are directed to franchisees, including one in which Worldwide Sourcing uses a fax broadcaster to send faxes to franchisees on behalf of the Approved Suppliers. (Id. ¶ 12).

         III. The Faxes

         A. The 2013 Fax

         In August 2013, Wyndham emailed Safemark a database with contact information for its franchisees. (Doc. 70-9, ¶ 5, pp. 7-8). On September 4, 2013, and September 6, 2013, Safemark used a fax broadcasting company to transmit a one-page fax to the franchisees listed in the Database. (Id. ¶¶ 5; Doc. 60-4, pp. 4-5; Doc. 43-1, pp. 3-4). These faxes (the “2013 Faxes”) state in pertinent part: “Free month (average value $500 per 100 rooms, ” “Free Battery ...

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