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Gen-Kal Pipe & Steel Corp v. M.S. Wholesale Plumbing, Inc.

Court of Appeals of Arkansas, Division I

February 20, 2019

GEN-KAL PIPE & STEEL CORP. AND EUGENE KALSKY APPELLANTS
v.
M.S. WHOLESALE PLUMBING, INC. APPELLEE

          APPEAL FROM THE POPE COUNTY CIRCUIT COURT [NO. 58CV-15-440] HONORABLE KEN D. COKER, JR., JUDGE

          Cullen & Co., PLLC, by: Tim Cullen, for appellants.

          Streett Law Firm, P.A., by: Alex G. Streett and James A. Streett; and Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for appellee.

          DAVID M. GLOVER, JUDGE

         The Pope County Circuit Court granted summary judgment to appellee MS Wholesale Plumbing, Inc., on behalf of itself and persons similarly situated (MS Wholesale) against appellants Gen-Kal Pipe & Steel Corporation (Gen-Kal) and Eugene Kalsky (Kalsky), jointly and severally, for $12, 500, 000. On appeal, Gen-Kal and Kalsky argue the summary judgment must be reversed as to both of them. Gen-Kal argues (1) Gen-Kal's answer was a nullity, and the circuit court lacked jurisdiction to enter summary judgment against it; (2) as a defaulting defendant, Gen-Kal was not a "party" for requests for admissions; (3) without requests for admissions, there was no evidence in the record to support the $12, 500, 000 in damages; and (4) the circuit court abused its discretion by considering the motion to set aside the judgment under the wrong standard. Kalsky argues (1) his correspondence was not an answer; therefore, he was not subject to summary judgment; (2) his only liability was derivative of Gen-Kal, and if the judgment against it is reversed, then judgment against him must also be reversed; (3) there is no finding to support piercing the corporate veil; and (4) the circuit court abused its discretion by considering the motion to set aside the judgment under the wrong standard. We affirm the circuit court's decision in all respects.

         In October 2015, MS Wholesale filed a class-action complaint against Gen-Kal and Kalsky alleging both had violated the Telephone Consumer Protection Act (TCPA) of 1991, 47 U.S.C.A.§ 227 (West 2018), by sending a wholly unsolicited facsimile offering steel pipe for sale without the required "Opt-Out Notice" (language stating that the sender's failure to comply within thirty days to a request to stop sending such faxes is unlawful, in violation of 47 U.S.C. § 227 and 47 C.F.R. § 64.1200). MS Wholesale prayed that the circuit court enter an order certifying the class-action claims and for judgment in favor of MS Wholesale and the proposed class in the amount of $500 for each fax transmission in violation of the TCPA; it requested treble damages for each fax transmission on a finding Gen-Kal and Kalsky had willfully and knowingly violated the TCPA; it sought a jury trial; and it asked for such other relief as was just and equitable under the circumstances. A copy of the fax-transmission document at issue was attached to the complaint.

         Timely service of the summons and complaint was obtained on both Gen-Kal and Kalsky. On December 31, 2015, Kalsky sent the following correspondence, on Gen-Kal's letterhead, to both MS Wholesale's counsel and the deputy circuit clerk of Pope County:

         Case NO. 58CV-2015-440 MS Wholesale Plumbing vs. Gen-Kal Pipe & Steel Corporation

         In response:

1. We take the fax laws seriously in my office.
2. Please see the attached fax consent form. It was faxed to MS Wholesale Plumbing in June 2005. As usual, a lot of companies do not respond to the initial fax. We then follow up with a phone call. That follow up phone call was done 6/28/2005 at which time Bill Srygley gave his verbal permission for us to send the faxes. Please note that the date at the top of the page is printed by the fax machine.
3. If the faxes were so bothersome, why didn't they simply place a phone call to us (toll free number is in the header line of our faxes) and ask to be removed? We also provide a disclaimer at the bottom which gives them the opportunity to opt out.
4. What we are faxing are not junk faxes. We do, in fact, sell a product that plumbing supply companies do use. I would go further on to say that this is why we were given the ok to fax. It sure makes sense.
5. I would like to bill MS Wholesale Plumbing the amount of $1000.00 for the time expended on this attempt to extort money from ...

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