Finance firm hit with $4K fine for TCPA violations against Huntingdon Valley company

By Nicholas Malfitano | Apr 4, 2019

Telephone Consumer Protection Act  

PHILADELPHIA – A federal judge levied a $4,000 fine on a finance corporation that sent eight unsolicited faxes to a Huntingdon Valley-based aircraft engine manufacturer and real estate corporation, stating it violated the Telephone Consumer Protection Act (TCPA).

On March 26, U.S. District Court Judge Anita B. Brody ruled that Singer Financial Corporation was liable under the TCPA for sending unwarranted and unsolicited sales correspondence via fax to KHS Corporation.

“When not in the manufacturing plant or visiting clients, the Schwemlein brothers work in a small office, adjacent to the manufacturing plant, that they shared only with their secretary. This office includes a fax machine...” Brody explained.

“KHS considers this fax machine to be necessary for its machine shop business because some clients preferred to send purchase orders and receive technical information by fax. Because of this, KHS has had a continuous policy of never giving permission to anyone to send faxed advertisements to its fax number.”

The Schwemlein brothers also owned and managed two commercial real estate entities in Philadelphia: Central Square Center, Inc., acquired in October 1992, and Ambassador Center, Inc., acquired in 1995. Although the Schwemlein brothers used business cards that listed the KHS fax number, they only gave these cards to visitors to the KHS plant or to potential KHS customers.

Yet, Paul Singer, the owner/operator of Singer Financial Corporation, a private lending firm, testified that he received permission from William and Karl Schwemlein to send them faxed information – but Brody found that to be impossible.

“It would have been impossible for Paul Singer to get Karl Schwemlein’s number in this way in 1990 or 1991, because the Schwemlein brothers did not acquire any commercial real estate until October 1992, and did not post signs listing their phone number at any commercial real estate sites until 1995. In addition, if this conversation had occurred, it would have been inconsistent with the Schwemlein brothers’ policy of never giving out KHS’s fax number for any purpose related to their commercial real estate business,” Brody said.

Per the law, the TCPA “creates civil liability for defendants who use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.”

“I found that Singer Financial sent eight faxes to KHS in 2015. Therefore, the remaining issues as to Singer Financial’s liability are: (1) Whether these faxes were advertisements, and (2) Whether these faxes were unsolicited,” according to Brody.

However, Brody did confirm the faxes were both advertisements and “unsolicited.”

“Because I do not credit Paul Singer’s testimony that he received permission from Karl Schwemlein to send faxed advertisements in 1990 or 1991, there is no evidence of any express invitation or permission by KHS to receive faxes from Singer Financial,” Brody said.

Brody discounted Paul Singer from being personally liable for the violations.

“I find that a corporate officer is not liable under the TCPA under common law personal liability principles. Therefore, even though Paul Singer personally directed and participated in the sending of unsolicited faxed advertisements to KHS, he is not personally liable. In addition, there is no evidence that the faxes were really sent on Paul Singer’s behalf, rather than Singer Financial’s behalf,” Brody stated.

Brody levied a fine of $500 per TCPA violation, but declined to up the ante due to there being a lack of evidence that Singer Financial Corporation knowingly and willingly violated the law.

“Based upon the evidence presented at trial and an examination of the relevant law, I find that Singer Financial Corporation committed eight violations of the TCPA by sending eight unsolicited faxed advertisements to KHS Corporation. I also find that Paul Singer is not personally liable for these violations. I will enter judgment against Singer Financial in the amount of $4,000,” Brody concluded.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-00055

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com

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