Spivey v. Adaptive Mktg. Llc.

Decision Date20 September 2010
Docket NumberNo. 09-3619.,09-3619.
Citation622 F.3d 816
PartiesQuinten E. SPIVEY, Plaintiff-Appellant, v. ADAPTIVE MARKETING LLC, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

OPINION TEXT STARTS HERE

Mark L. Brown, Attorney (argued), Lakin Chapman, LLC, Wood River, IL, for Plaintiff-Appellant.

Nader R. Boulos, Attorney (argued), Kirkland & Ellis, LLP, Chicago, IL, for Defendant-Appellee.

Before O'CONNOR, * Associate Justice, and KANNE and ROVNER, Circuit Judges.

O'CONNOR, Associate Justice (Ret.).

Quinten E. Spivey challenges the district court's grant of summary judgment against him on his claims against Adaptive Marketing for breach of contract and unjust enrichment. Because we find that no reasonable jury could find in favor of Spivey, we affirm the judgment of the district court.

I

Appellant Spivey called a telemarketing number in January 2003 and ordered an Atkins diet product. This dispute arises from the rest of that telephone conversation.

A.

Adaptive has produced a partial recording of what it alleges is the conversation between the telemarketer and Appellant. According to the district court, the recording is as follows:

Telemarketer: Thank you for your order. We're sending you a risk free 30-day membership to HomeWorks, offering hundreds of dollars in savings at stores like the Home Depot, K-Mart, Linens & Things and many more. After 30 days, the service is extended to a full year for just $8.00 per month, just $96.00 annually. Billed in advance as HomeWorks with the credit card you are using today. You will be charged an annual fee at the end of your 30-day trial period and at the beginning of each new membership year. If you want to cancel, simply call the toll-free number that appears in your kit in the first 30 days and you will not be billed. If you don't save hundreds of dollars in your first year, just call and you'll get a full refund. So look for your kit in your mail is that okay?

Male: Okay.

Spivey v. Adaptive Mktg., LLC, 660 F.Supp.2d 940, 943-44 (S.D.Ill.2009). Adaptive alleges that the male in the conversation was Spivey. Spivey's credit card statements show a charge of $96.00 by HomeWorks in March 2003, a charge of $149.95 by HomeWorks due in January 2004, charges of $199.95 in January 2005 and January 2006, and an additional charge of an undetermined amount in January 2007. See Appellee's Resp.App. (RA) at 65-69. After Spivey called to protest the January 2007 charge, $179.70 was refunded. Pl.'s Resp. to Def.'s First Set of Interrogs. at 3, Appellant's Appendix [hereinafter App.] at 56.

In his first amended complaint, Spivey claimed that he did not recall participating in the conversation and could not confirm that the voice in the recording was his. In later filings, Spivey admitted that the male voice in the recording sounds like his voice with a cold, but maintained that the short length of the male's statement prevented him from conclusively determining whether the voice was his. He continued to maintain that he did not recall taking part in the conversation. Pl.'s Resp. to Def.'s First Set of Reqs. for Admis. at 1, RA at 70.

The complaint also avers that Spivey did not receive a “welcome kit” from Adaptive, as discussed in the conversation, or, that if a welcome kit was delivered to his home, it was designed to look like junk mail so that he discarded it without opening it. In a later deposition, Appellee's attorneys extensively questioned Spivey about the welcome kit, as detailed below:

Q. Can you confirm or deny the welcome kit and the terms and conditions contained in there that you talk about in the other part of your Complaint?

A. Can I confirm or deny-

Q. That you received them.

A. I have no record of receiving them. No knowledge of receiving them.

Q. My question is, can you confirm or deny that you received them? ...

A. What I can confirm is that I do not have a file that contains anything from Adaptive, and that it is my general practice to open and review all the mail that comes to my home. That's-that's all I can confirm.

....

Q. Can you tell me I did not receive that piece of mail?

A. I can tell you I did not receive that piece of mail.

Q. Okay. It didn't show up at your house, and you threw it away?

A. I do not believe that I did or would have done that.

Q. Okay. It's your testimony and you're swearing under oath-you are taking the oath seriously, I believe that. I just want to make sure I know exactly what you're saying. You're telling me you did not receive it. You're not telling me I don't remember receiving it. Those are two different things, in my mind.

A. I don't know if I can answer the question any better than that. I have no recollection, no record of receiving it.

Dep. of Quinten E. Spivey, July 9, 2009 at 29-31 [hereinafter Spivey Dep.], App. at 430-32; see also Spivey Dep. at 15, RA at 75; Spivey Dep. at 36, RA at 80.

In response to Spivey's testimony about the welcome kit, Adaptive proffered evidence as to its standard business practices. In an affidavit and deposition, Adaptive's Director of Affinity Marketing, Judy Muller, explained that in instances like this one where Adaptive uses a third party to market Adaptive's products, the third party solicits customers, but Adaptive remains responsible for fulfillment, including shipment of membership materials and provision of customer service. Muller Aff. at 2, App. at 514. Specifically, Muller testified that fulfillment includes sending the customer a “self-mailer, 11 by 17 postcard essentially,” that contains a list of “benefit providers, a membership card with a membership ID number, terms and conditions, and an 800 number to access the program, as well as a website URL to access the program.” Spivey, 660 F.Supp.2d at 947 (quoting Muller Dep.). Muller further testified that after a sale is loaded into Adaptive's database, the fulfillment materials are mailed and usually reach the customer in seven to ten business days. Id. She also explained that Adaptive's “corporate policy” is to send renewal notices for annual billings. Id.

Adaptive provided a copy of the Membership Agreement that was effective for the period in which Spivey allegedly joined the HomeWorks program and that Adaptive alleges it mailed to Spivey. In relevant part, the Agreement provides:

TERMS OF MEMBERSHIP AND MEMBERSHIP AGREEMENT ... UPON ENROLLMENT, YOU AGREE TO THESE TERMS AND CONDITIONS. WE URGE YOU TO READ THIS MEMBERSHIP AGREEMENT CAREFULLY AND IF YOU HAVE ANY QUESTIONS, CALL OUR CUSTOMER SERVICE REPRESENTATIVES AT THE NUMBERS LISTED ON YOUR MEMBERSHIP CARD.

....

2. Membership Term. Your Membership is effective for a period of twelve months following the membership enrollment date under the annual membership plan or for the period agreed upon under the installment membership plan authorized by You....

3. Renewal of Membership. Unless You notify Us that You wish to terminate this Agreement and cancel Your Membership by following the instructions below, your Membership will be renewed automatically and You will be charged the then-effective Membership Fee which will appear on your statement.

4. Payment of Enrollment Fee. The payment of your trial period and Enrollment Fee ... is made automatically by a direct charge(s) to the billing source authorized by You in accordance with the payment terms to which You agreed. We reserve the right to increase or decrease the Enrollment Fee for each renewal Membership Term effective upon renewal of your Membership. Under the monthly billing plan, We may, at our discretion, increase the monthly Enrollment Fee once in any twelve month period not more than $2.00 per month....

....

7. Entire Agreement. This Agreement contains all of the Terms of Membership and no representations, inducements, promises or agreements concerning the Membership not included in this Agreement shall be effective or enforceable....

....

9. TERMINATION OF MEMBERSHIP. YOU MAY TERMINATE

THIS AGREEMENT AND YOUR MEMBERSHIP AT ANY TIME BY CALLING U.S. AT THE TOLL FREE NUMBER ON YOUR MEMBERSHIP CARD OR BY NOTIFYING U.S. IN WRITING AT MEMBERSHIP SERVICES, P.O. BOX 24311, OMAHA, NEBRASKA. YOUR CANCELLATION WILL BE EFFECTIVE PROMPTLY UPON THE RECEIPT OF YOUR CANCELLATION NOTICE.... Doc. No. 122-2, VTRU 01697-01698.

Spivey, 660 F.Supp.2d at 944-45. On these facts and as detailed below, the district court granted Adaptive's motion for summary judgment on all claims.

B.

The district court first assessed Spivey's claim that Adaptive breached an oral contract formed during the telemarketing call by charging an annual fee in subsequent years higher than the $96 annual charge mentioned in the telemarketing call. In response, Adaptive pointed to the Written Agreement, which expressly permits increases to the annual enrollment fee. To determine whether Adaptive had breached an oral contract in charging more than $96 per year, the district court had to examine whether there was an oral contract that could have been breached. Citing Illinois law, the court noted that Spivey, as the party seeking relief from an alleged breach, bears the burden of establishing both the existence and terms of the oral agreement. Id. at 945. The district court noted Spivey's “reservations” as to whether the call had in fact occurred, but explained that [i]n order for Spivey's breach of contract claim to go forward, the Court must assume that the conversation, as memorialized above, occurred and that Spivey accepted a trial membership in HomeWorks. If Spivey maintains otherwise, then there was no contract to breach, and his claim must be dismissed.” Id. at 946. The court accordingly assumed that the conversation had occurred and resulted in the following terms:

Spivey agreed to accept a risk-free 30-day membership in HomeWorks, which, after the 30-day trial period would be extended to a full year for $8.00 per month, or $96.00 annually. Spivey would be charged an annual fee at the end of the trial...

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