Michigan Federal Court gives guidance on proving your vicarious liability TCPA claim

On 1/19/2024 a Michigan Federal Court gave guidance on how to prove your vicarious liability TCPA lawsuit. It is from lawsuit Dobronski v. Family First Life, LLC et al, No. 2:2022cv12039. Mark sued 17 different defendants for 13 causes of action.

Predictably the defendants did not care for this at all and each of them moved to dismiss. The court let defendants get away but kept others and explained why in a 60 page opinion full of education on how to prove your vicarious liability TCPA claim.

Dkt 178 Donbronski v Family FIrst Life.pdf

Download PDF • 374KB

A Quick Overview

Mark Donbronski has filed around 35 telemarketing lawsuits. Mark's core allegation in this lawsuit was that

"Family First is a life insurance distributor that acts as an Insurance Marketing Organization (IMO), facilitating a multi-level marketing scheme that is well-established in the life insurance industry . . . He says that IMOs like Family First contract with insurance carriers who provide life insurance products that the IMO sells to consumers . . . The IMOs employ independent contractors, which Dobronski calls “agents,” to market and distribute the insurance carrier’s products to consumers . . . The IMO’s role is to facilitate a contract between the insurance carrier(s) and the agents so that an agent can market the carrier’s insurance product."

In simple terms, Family First acts like an "insurance distributer" and they pay "street agents" to actually market and sell the product. To help their agents do that, they supply them with leads and a phone dialer. In turn, Family First obtains their "product" from big insurance companies "insurance manufacturers" like United, Americo, and Great Western.

Mark received calls from the "street agents" who were working with the "insurance distributer" who got their product from the "insurance manufacturers". And Mark sued the entire chain from top to bottom, 17 total defendants.

Why is proving vicarious liability against telemarketers important?

Generally it is impossible or useless to sue the telemarketer that dialed your number. Quite often they are overseas and it is pointless to sue them - you would not get a dime out of them.

"Dobronski admits that no defendant is directly liable for the offending calls, as he received these calls from unidentified overseas telemarketers that then transferred the calls to agents within the United States. He argues that defendants are nonetheless vicariously liable for the calls under traditional agency theories. Defendants argue that they do not exert control over the callers to the extent that they can be held liable for the callers’ actions."

The entity to hold accountable and much more likely is able to sustain a judgement is who they were calling for (the "Seller").

Teachable Moment #1

In my "How to document solicitation phone calls for a lawsuit" I mentioned ending telemarketing calls with a do-not-call request or following up with a do-not-call request. It isn't clear what Mark did, but note what the court held:

"Dobronski has alleged an injury-in-fact sufficient to satisfy his standing requirements. However, this only applies to the truly unsolicited or “cold” calls he received, which are calls 1, 3, 4, 7, 8, 13, 15, 16, 18, 24, 29, 30, 31, and 33.

The remaining calls, however—2, 5, 6, 9, 10, 11, 12, 14, 17, 19, 20, 21, 22, 23, 25, 26, 27, 28, 32, and 34-56—were follow-ups resulting from Dobronski’s feigned interest in the insurance products being sold, and thus did not cause injury and lack standing. See Dobronski v. Total Ins. Brokers, LLC, No. 21-10035, 2021 WL 4452218, at *4 (E.D. Mich. Sept. 29, 2021) (concluding that the plaintiff (Dobronski) gave “implied consent” to calls when he “engaged in conduct [that was] designed to encourage” additional calls). As to these calls, Dobronski’s implied consent renders him without standing to pursue claims."

It is very important to follow up or end calls with a do-not call request.

Teachable Moment #2

This court reiterates that holding the Sellers responsible for the calls is based on traditional agency law.

"the FCC concluded that inclusion of the phrase “on behalf of” in § 227(c)(5), which creates a private right of action to challenge multiple live calls, allowed for a “seller” to be held vicariously liable under traditional agency tenets, including “not only formal agency, but also principles of apparent authority and ratification.” Dish Network, 28 FCC Rcd. at 6584, ¶ 28."

The court then cited allegations against Family First that supported agency liability:

"Dobronski alleges that Family First knowingly provides agents with access to ATDS which use a random number or sequential number generator and have the capacity to call persons at random with no human involvement. (ECF No. 99, PageID.1016-1017). Family First promotes the illegal telemarketing scheme alleged as an essential tool for selling the insurance companies’ products and is aware that its practices are illegal and tortious. (Id., PageID.1018). Family First also knows that its leads, generated by random dialing, did not give express consent to be dialed, and that the practice results in the same consumers being contacted by multiple agents to be sold duplicative insurance products.

Dobronski expands on Family First’s role in his response, alleging that it trains its agents on telemarketing. (ECF No. 128, PageID.1924). He attaches exhibits showing insurance applications that list “Family First Life” as the agency and showing a list of available Family First training videos. (Id., PageID.1945-1960). Although the undersigned cannot consider new allegations or exhibit evidence at this stage, the exhibits essentially show facts that Dobronski has pled in the First Amended Complaint."

Mark learned from a previous failure where he

“did not allege facts indicating that the telemarketers were acting ‘on behalf of’ the defendants or that they were subject to their control.” Here, unlike in Lucas, Dobronski has alleged that multiple telemarketers identified themselves as affiliated with Family First, and that Family First was listed as the agency on insurance applications sent to Dobronski."

One method to tie the Telemarketer and Seller together is after the Telemarketer who initially screens you passes you to the Seller, and the end of the call as the phone agent if they know who called you. Typically they won't, but then inform the phone agent that you have been getting lots of calls from the Telemarketer and you have repeatedly told the Telemarketer that you don't want these calls but they keep calling.

Often times the phone agent will be flustered and will admit to hearing this same complaint from others. This shows the Seller has knowledge of illegal calls before they accepted your call from the Telemarketer. This can go a long ways to proving your vicarious liability TCPA lawsuit.

"On multiple occasions, Dobronski alleges that he asked named defendants about the source of the originating call. Bonanno informed him that the calls were from “their call center”; Perez told him that the call originator was “our lead generation specialist[,]” and on subsequent calls that the originator “works for her company[,]” and that she “utilize[d] third-party telemarketers located in Asia”; Grant told him that the call originator “works for [his] transfer company”; Christle stated that the callers work in one of his company’s call centers; Drouhard said that her company, Family First, “uses call centers outside the USA”; Vongdara said that three of the initiating callers Dobronski inquired about were his employees; Adams admitted to the use of a call center to originate calls; and Igweh did so as well, stating that Adams was his employee."

The court continues to teach on elements proving vicarious liability

"Here, unlike in Lucas, Dobronski has alleged that multiple telemarketers identified themselves as affiliated with Family First, and that Family First was listed as the agency on insurance applications sent to Dobronski.

These allegations are similar to those made in Dobronski v. SunPath Ltd., in which the district court found that the allegation that the caller was “affiliated with [defendant]” “provide[d] support for Plaintiff’s effort to hold [the defendant] responsible for the phone calls giving rise to his claims in this case, whether as the direct initiator of these calls or, perhaps, under a theory of vicarious liability.”

Other courts have also found that vicarious liability was supported by similar facts. See, e.g., Krakauer v. Dish Network, L.L.C. (where one defendant authorized another to use its name and logo in carrying out its operation, took no meaningful action to ensure TCPA compliance, and profited from the other defendant’s actions); Hossfeld v. Gov’t Emps. Ins. Co. (defendant company was liable for the actions of third-party telemarketers where it contracted with them, created scripts for them, knew they were using ATDS, and had them make calls with ATDS before forwarding the calls to its representatives)."

So far so good for Mark on vicarious liability, but then he had trouble with the "insurance manufacturers"

"Dobronski alleges that the companies are “well aware” that Family First and its agents engage in illegal telemarketing to sell their products. He further alleges that they support these activities by “giving the agents access to their respective computer systems for purposes of pricing data and entering prospective insureds’ application information, as well as the authority to use the company’s trademark and service market[.]” (Id.). This, he says, establishes actual authority and ratification. (Id.). He also alleges having received several insurance applications after feigning interest in the products, and that each company was listed as the insurance provider on at least one application."

"The insurance companies are correct that there is no indication they directed or acquiesced in the conduct of having offending calls placed by overseas telemarketers and then transferred to their agents. Simply knowing about, as Dobronski has alleged, it is not enough."

"An agent acts with actual authority “when, at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent so to act.” Dobronski has not adequately pled actual authority as to the insurance companies. Though the agents allegedly had actual authority to prequalify consumers for insurance products, as shown by the “access to their respective computer systems for purposes of pricing data and entering prospective insureds’ application information” and “authority to use the company’s trademark and service market,” (ECF No. 99, PageID.1020), this does not extend to the tactics used to sell the products to consumers. Unlike Family First, the insurance companies are not alleged to provide agents with telemarketing resources, scripts, or ATDS, or in any other way authorized telemarketing practices that violate the TCPA and Michigan statutes."

"Lastly, “[r]atification is the affirmance of a prior act done by another, whereby the act is given effect as if done by an agent acting with actual authority.” 1 Restatement Agency, 3d, § 4.01(1). A principal can ratify an act by “(a) manifesting assent that the act shall affect the person's legal relations, or (b) conduct that justifies a reasonable assumption that the person so consents.” 1 Restatement Agency, 3d, § 4.01(2). Here, the acts were not ratified because Dobronski has not alleged that the insurance companies manifested assent or that they consented to the calls. The insurance applications were sent to Dobronski by the agents, not the insurance companies, and though they purported to be offers of sale, the insurance companies are not alleged to have accepted any application from Dobronski or his aliases."

Had Donbronski purchased an insurance policy originating from an "insurance manufacturer" he might have been able to prove liability through ratification. Another possible way is if Donbronski had informed the "insurance manufacturers" that the "insurance distributer" was using illegal calls to telemarket and the "insurance manufacturers" did nothing to stop it.

Let's look at a second case, Hensley v. Dimension Service Corporation, No. 5:24-CV-378-KKC, 2025 WL 1679841 (E.D. Ky. June 13, 2025).

Hensley v. Dimension Service Corporation Dkt 18.pdf

Download PDF • 175KB

Mr. David Hensley registered his phone number on the national do-not-call list, but went on to receive about 100 phone calls from unknow numbers. When Mr. Hensley didn't answer, they callers would leave voicemails of just background noise.

But on one call, he did answer and went through with a purchase of a vehicle service contract from the phone agent. This way he identified the seller as Pelican Investment Holdings LLC, Sing for Service LLC as the payment plan provider, and National Administrative Service Co LLC as the administrator. Mr. Hensley then sued them all along with a Dimension Service Corporation.

Of course they all filed a motion to dismiss, arguing that Mr. Hensley failed to plead facts sufficient to state a claim for a TCPA violation under any theory of liability — whether direct or vicarious — against any defendant. The judge ruled that Mr. Hensley had plead a claim against Pelican [who sold him the policy] but let Sing for Service, National Administrative Service Co, and Dimension Service Corporation go.

The Defendants acknowledge that liability for violations of Section 227 of the TCPA may be based upon a theory of direct or vicarious liability. “[F]ederal common law principles of agency,” guide the Court’s evaluation of vicarious liability under the TCPA . . . A “formal” agency relationship is not required . . . Instead, defendants may be held vicariously liable for TCPA violations “under a broad range of [federal common-law] agency principles, including not only formal agency, but also principles of apparent authority and ratification.”

Pelican

Mr. Hensley tagged Pelican fair and square:

The FAC states that during the last call Hensley received, an automated system connected him to a Pelican salesman from whom he agreed to purchase a vehicle service contract. This allegation alone allows the Court to draw the reasonable inference that Pelican is either directly or vicariously liable for that phone call and other similar phone calls Hensley claims he received.

Everybody else:

Mr. Hensley didn't allege that any other defendant was directly responsible for initiating the calls, which only left a vicarious liability attack. And Mr. Hensley did allege the business relationship between Pelican and the other defendants as described in the introduction to the case, but apparently not any facts about how they knew about or directed the unwanted calls.

“the concept of agency posits a consensual relationship in which one person, to one degree or another or respect or another, acts as a representative of or otherwise acts on behalf of another person with power to affect the legal rights and duties of the other person.”

Basically what the court said is just because Pelican buys energy, Mr. Hensley can't sue their electric company. This is generally a fair concept. A telephone consumer protection act complaint needs to tie each defendant into the claims.

Would you like a free case review? Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!

Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.

The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.