Felland v. Digi-Tel

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IN THE COURT OF APPEALS OF MARYLAND No. 20 September Term, 2003 _________________________________________ FELLAND LIMITED PART NERS HIP v. DIGI-TEL COMMU NICATIONS, LLC __________________________________________ Bell, C.J. *Eldridge Raker Wilner Cathell Harrell Battaglia, JJ. __________________________________________ Opinion by Eldridge, J. _________________________________________ Filed: December 22, 2004 * Eldridge, J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, he also participated in the decision and adoption of this opinion. This is a private action, for monetary damages, under the Telephone Consumer Protection Act, 47 U.S.C. § 227, against an employer based upon an employee s alleged violations of the federal statute. The alleged violations consisted of broadcasting unsolicited commercial telephone facsimile advertisements. The trial court granted the defendant s motion for summary judgment on the ground, inter alia, that the employee s actions were not within the scope of his employment and that, therefore, the employer was not liable, under the principle of respondeat superior, for the employee s actions. The Court of Special Appea ls affirmed on an alternative ground which had also been relied on by the trial court. W e shall hold that the evidence was insufficient to generate a triable issue that the employee s alleged unlawful actions were within the scope of his employme nt. Con sequ ently, we shall affirm the decisions below on this ground. I. The basic facts relevant to the scope of employment issue in this case are, for the most part, undisputed. To the extent that there is any dispute over these facts or the reasonab le inferences to be drawn from them, we shall set forth such facts or inferences in the light most favorable to the plaintiff. See, e.g., Lee v. Cline, ___ Md. ___, ___ A.2d ___ (2004); Walk v. Hartford Casualty , 382 Md. 1, 14, 852 A.2d 98, 106 (2004); Jurgensen v. New Phoenix , 380 Md. 106, 114, 843 A.2d 865, 869 (2004); Sadler v. -2Dimensions Healthcare Corp., 378 Md. 509, 533-534, 836 A.2d 655, 669 (2003); Remsburg v. Montgomery , 376 Md. 568, 579-580, 831 A.2d 18, 24 (2003). The defendant-responden t, Digi-Tel Communications, LLC, was formed in 1998 as a limited liability company organized pursuant to the laws of Virginia. The company sells cellular telephones and service as an authorized representative of Nextel Communications, Inc. Digi-Tel has retail business locations in the following municipalities: Fairfax, Virginia; Winchester, Virginia; Vienna, Virginia; Rockville, Maryland; and Baltimore, Maryland. In 1999, Digi-Tel hired John Taylor as a sales representative. The written employment contract between Digi-Tel and Taylor, in the first paragraph of the contract, provided that [t]he duties of the Representative [Taylor] shall be those of a sales representative and in connection therewith the Representative shall represent the Company in the solicitation, sale, lease and promotion of products to purchasers, and users of such products and service s. The employment contract went on to provide, in paragraph six, that Digi-Tel had the right to set policies, standards and guidelines for the conduct of the sales representa tive, that the sales representative agreed to abide by such policies, standards and guidelines, and that Digi-Tel s policies and procedures were incorporated into the employment contract. Paragraph 16 of the employment contract stated that the sales representative shall in no case be authorized to change, modify or make exceptions to Company policies [and] procedures . . ., nor enter into any agreement or contract which would bind the Company for any debt or obligati on. -3The contract recited that Digi-Tel shall not compensate Taylor for certain travel, or entertainme nt, expenses related to performing the business of the Com pan y and that Digi-Tel would pay to Taylor comm issions on all sales completed by Taylor. Taylor s only compensation from Digi-Tel consisted of the sales commissions. The written employment contract between Digi-Tel and Taylor did not mention advertising at all. Thus, the emplo yment contract itself neither expressly authorized nor expressly prohibited Taylor from creating and using advertising via facsimile to sell the Nextel products and services. Nevertheless, the written contract between Digi-Tel and Nextel required that all of Digi-Tel s advertising must receive Company s [Nextel s] prior written approv al. Several affidavits, the deposition of John Taylor, the pertinent contracts, and other docume nts were submitted to the trial court in connection with Digi-Tel s motion for summary judgment and the plaintiff s opposition thereto. The affidavit by the President of Digi-Tel stated in relevant part as follows: 3. Digi-Tel sells cellular telephones and service for Nextel Communications, Inc. ( Nextel ) pursuant to a contract. A true and correct copy of Digi-Tel s contract with Nextel is attached hereto as Exhibit A. 4. Virtually all of Digi-Tel s advertising materials, including flyers, are created by Nextel. Digi-Tel does not create its own advertising because all such advertising would have to be approved by Nextel in advance pursuant to a clause of the contract . . . . 5. Digi-Tel employs a full-time Director of Marketing, Sam Talbert, who is responsible for placing advertisem ents on DigiTel s behalf. The bulk of Digi-Tel s advertising is done through -4newspaper and radio. Talbert does not have the authority to place an advertisement without my approval or the approval of one of the other two officers of the com pan y. 6. Digi-Tel does not, and has never, used fax machines to promote its business or to advertise in any way. Digi-Tel has only seven fax machines and these are used for receiving incoming faxes or communicatin g with current customers or other entities with whom Digi-Tel does busine ss. *** 9. Taylor s duties for Digi-Tel are to sell cellular telephones and service for which he is compensated on a commiss ion-only basis. Taylor s duties do not include creating or placing advertisem ents for Digi-Tel. 10. Taylor is assigned to work out of Digi-Tel s Virginia office during normal business hours. Digi-Tel provides Taylor with a cubicle, a desk, and a telephone to enable him to sell DigiTel s products. In addition, Digi-Tel provides Taylor with all advertising materials, including written flyers, which are, in turn, provided to Digi-Tel by Nextel. 11. Digi-Tel did not learn that Taylor had hired Capital Fax ( Capital ) to send advertisements regarding Digi-Tel s services until January 2002, when Digi-Tel s attor neys provid ed Digi-Tel with a copy of Exhibit A referenced in the Complaint and bearing John Taylor s name. 12. Taylor s actions in creating an advertising flyer and hiring Capital were all done without the knowledge of Digi-Tel and were wholly unauth orized. John Taylor s affidavit set forth the nature of his duties for Digi-Tel and the facts underlying the alleged violations of the federal Telephone Consumer Protection Act. The pertinent portions of the affidavit are as follows: -5 3. M y duties for Digi-Tel are to sell Nextel Communications, Inc. ( Nextel ) cellular telephones and service for which I am compensated on a commiss ion-only basis. I have no other duties. 4. I am assigned to work out of Digi-Tel s Fairfax, Virginia office during normal business hours. Digi-Tel provides me with a cubicle, a desk, and a telephone to enable me to sell Digi-Tel s products. In addition, all advertising materials are provided to me by Digi-Tel. I have been instructed by Digi-Tel to obtain advertising flyers by accessing Nextel s web site and printing out the flyers created by Nextel. 5. M y duties do not include creating or placing advertisem ents for Digi-Tel. 6. I do not have authority to enter into contracts on Digi-Tel s behalf or to create advertising materials for Digi-Tel. 7. In early January 2001, I was walking past the fax machine in Digi-Tel s Fairfax, Virginia office and saw an advertisement that had been faxed to Digi-Tel from Capital Fax ( Capital ). In the advertisem ent, Capital offered to send faxes to people in the Washington/B altimore area for a fee. 8. Without informing anyone at Dig i-Tel, I took Capital s advertisement off the fax machine, out of curi osity, and contacted Kevin Conner, the Capital employee referenced in the advertisem ent. Conner assured me that Capital s services were legal. I did not keep and no longer have a copy of Capital s advertisem ent. 9. As a result of my conversation with Conner, I received a letter and a price list from Capital. A true and correct copy of the information I received from Capital is attached as Exhibit B . 10. Without informing anyone at Digi-Tel, I decided to hire Capital on my own. I provided Capital with an advertising flyer that I created initially on my computer. I also gave Capital my personal check for $100. It was my understanding that I was hiring Capital on my own behalf and not on behalf of Digi-Tel. Capital modified the flyer that I prepared by adding language at the bottom giving instructions to recipients who receive the flyer in error. -6 11. In the second half of February 2001, Conner provided me with a list of the telephone numbers to which Capital had faxed my flyer. I did not keep the list and do not have it. 12. I have never requested reimbursement from Digi-Tel for the $100 I paid to Capital, nor have I been reimbursed. 13. I never informed anyone at Digi-Tel about my dealings with Capital until January 2002, when the President of Digi-Tel showed me the Complaint that had been filed against Digi-Tel and a copy of the flyer that I had created . Taylor stated in his deposition testimony that he had, sometime in the past, read a Digi-Tel written form which had informed Digi-Tel s sales representatives that the use of e-mail and faxes was limited and that, whether it be an e-mail or a fax, you can only send that to your own customers that you have already. Taylor testified that he did not know the reason for that policy and that he was not aware of any other written materials pertaining to sales representatives advertising activities . Taylor also testified that officers of Digi-Tel had specifically told him that he should not use . . . faxing as a means of sales of Digi-Tel s products and that [i]t was just a general policy that you re not supposed to do that. Taylor s deposition testimony concerning his use of Capital Fax to broadcast facsimile advertisem ents contained more detail than the account set forth in his affidavit, but Taylor s depositi on testimony was entirely consistent with his affidavit. Taylor s deposition testimony concluded by stating that he had no authority from Digi-Tel to hire Capital Fax to send the facsimile advertisements, that he knew that he was violating Digi-Tel s poli cy, that he knew that he shouldn t have done it, and that Digi-Tel officials gave him a verbal reprimand -7when they found out what he had done. The plaintiff-petitioner Felland Limited Partnership submitted an affidavit by James Murphy who stated that he was Vice President of Sales at Teltronic, Inc., a Maryland corporation maintaining its principal office in Kens ington , Maryland. Teltronic has been a Nextel Authorized Dealer selling Nextel phones and services since 1995. Murphy s affidavit represented that, [d]uring 1998 several of Teltronic, Inc. Nextel customers advised our offices [that] they had received an advertisement via facsimile from Digi-Tel Communications, Inc. which is one of our comp etitors. The affidavit did not further identify the customers or the persons in Teltronic s offices who received this information. None of these advertisements was submitted to the Court, and no affiant or deponent purported to have seen or have personal knowledge of any facsimile advertisem ents sent by or on behalf of Digi-Tel except for those sent in 2001 by Capital Fax acting for John Taylor. Felland Limited Partnership, an entity with its office in Kensington, Maryland, in early 2001 allegedly received on its fax machin e some of the facsimile advertisements, for Nextel products and services, which were sent by Capital Fax pursuant to its contract with John Taylor. These faxes were sent from the District of Columbia. The copy of one of these facsimile advertisements, which was submitted by Felland to the trial court, contained the word NEXTEL in very large print at the top of the advertisem ent, followed by information regarding Nextel s cellular telephones and services, and with John Taylor s name and telephone number in large print near the -8bottom of the advertisem ent. A paragraph of additional information concerning Nextel telephones and services was below Taylor s name and at the bottom of the advertisemen t. This paragraph contained the word Nextel six times, but did not contain the word Digi- Tel. To the right of John Taylor s name and telephone number was, in fairly large print, the Nextel logo. To the left of Taylor s name and telephone number, in relatively small print compared to most of the rest of the advertisem ent, was the word Digi- Tel. This is the only place that the word Digi-Tel appeared in the advertisem ent. II. Felland filed a complaint against Digi-Tel, in the Circuit Court for Montgom ery Cou nty, pursuant to the private cause of action provis ion of the federal Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(3). Felland sought money damages, as provided for in the federal statute, for the unsolicited commercial facsimile advertisem ents allegedly sent by Capital Fax to Felland in early 2001. Following some disc ove ry, Digi-Tel filed a motion to dismiss, or, in the alternative, for summary judgmen t. Digi-Tel s principal argument was that John Taylor s actions, in hiring Capital Fax to broadcast unsolicited facsimile advertisements, were unknown to Digi-Tel, were not authorized by Digi-Tel, and were not within the scope of Taylor s employment with Digi-Tel. Alte rnat ively, Digi-Tel contended that Maryland trial courts are not authorized to entertain private actions for damages under the federal Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(3). -9The Circuit Court, after a hearing, agreed with both of these arguments, granted Digi-Tel s motion, and directed the entry of judgment for Digi-Tel. Because the parties and the Circuit Court relied on affidavits, deposition testim ony, and various documen ts, the Circuit Court s order must be treated as a grant of summary judgmen t. See Maryland Rule 2-322(c). In holding that John Taylor s actions were not within the scope of his employment for Digi-Tel, the Circuit Court stated: I also find that under the undisputed facts in this case, that the material facts are not in dispute as to Mr. Tayl or s conduct, and that his conduct was outside the scope of his employment by the defenda nt. And among the factors that I am considering are those that have been elicited by counsel, specifically that Mr. Taylor created the facsimile on his own and that the defendant was not aware of the facsimile at issue, that the defendant did not authorize the fax to be sent, and that the defendant s equipment was not used to send the fax, and that M r. Taylor created the fax, paid for the sending of the fax on his own, and was not reimbursed by the defenda nt. So I also find that, under the facts as presented in this case, that there is no material fact in dispute, and acco rdin gly, as a matter of law, find that Mr. Taylor s conduct was outside the scope of his emplo yment. I will grant summary judgment as to the defendant with respect the plaintiff s claim. Felland appealed to the Court of Special Appea ls which affirmed in an unreported opinion. The intermediate appellate court, relying upon its earlier opinion in R. A. Ponte Architects v. Investors Alert, 149 Md. App. 219, 815 A.2d 816 (2003), affirmed on the ground that Maryland trial courts lack jurisdiction to entertain the -10federal private cause of action created by the Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(3). In light of this holding, the Court of Special Appea ls did not reach Digi-Tel s principal argument that John Taylor s actions were outside the scope of his employme nt. Felland filed in this Court a petition for a writ of certiorari, presenting both the issue of state court jurisdiction over actions under 47 U.S.C. § 227(b)(3) and the scope of employment issue. The Court granted the petition, Felland v. Digi-Tel, 374 Md. 582, 824 A.2d 58 (2003), and, as earlier stated, we shall affirm on the ground that Taylor s actions, forming the basis for this lawsuit, were outside the scope of his employment for Digi-Tel. III. In Ponte v. Investors Alert, 382 Md. 689, 857 A.2d 1 (2004), this Court reversed the Court of Special Appeals decision in R. A. Ponte Architects v. Investors Alert, supra, 149 M d. App. 219, 815 A.2d 816, and held that Maryland trial courts have jurisdiction to entertain the private causes of action for damages created by the federal Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(3). W e re-affirmed this holding in Levitt v. Fax.Com, 383 Md. 141, 857 A.2d 1089 (2004). Con sequ ently, both the Court of Special Appea ls and the Circuit Court erred in holding that private actions for damages, pursuant to 47 U.S.C. § 227(b)(3), could not be brought in Maryland trial courts. Both sides agree that, if Maryland trial courts have jurisdiction over 47 U.S.C. -11§ 227 (b) (3) actions, the dispositive issue in this case is whether, under Maryland law, John Taylor s facsimile advertising activities were within the scope of his employment with Digi-Tel. 1 Several opinions of this Court in recent years have delineated the general rules for determining whether an employee s wrongful acts are within the scope of employme nt, thereby rendering the employer liable for such acts. See, e.g., Southern Management Corp. v. Taha, 378 Md. 461, 480-481, 836 A.2d 627, 638-639 (2003); Larsen v. Chinwuba, 377 Md. 92, 105-109, 832 A.2d 193, 200-202 (2003); Oaks v. Connors, 339 Md. 24, 30, 660 A.2d 423, 426 (1995); Ennis v. Crenca, 322 Md. 285, 293-296, 587 A.2d 485, 489-491 (1991); Sawyer v. Humphries, 322 Md. 247, 255-260, 587 A.2d 467, 470-471 (1991). Instead of attempting to restate those rules, we shall simply quote the summary set forth in Sawyer v. Humphries, supra, 322 Md. at 255-256, 587 A.2d at 470-471 (some internal quotation marks omitted): 1 Throughout this litigation, the plaintiff, the defendant, and the Circuit Court, have proceeded upon the assumption that Maryland common law controlled the scope of employment issue. Both sides have exclusively relied on cases involving Maryland common law scope of employment principles. Neither side has suggested the applicability of the law of Virginia (the place of the DigiTel and Taylor employment relationship and employment contract), or the law of the District of Columbia (the place from which the faxes were sent), or federal law (the law creating the cause of action), with respect to the scope of employment question. As a matter of Maryland appellate procedure, this Court could, in its discretion, either explore the choice of law issue sua sponte, or remand to the trial court for that court to decide the issue, or presume that another jurisdiction s law (if applicable) is the same as Maryland s, or accept for purposes of this case the parties assumption that Maryland scope of employment law controls. See Beale v. Risk Retention Group, 379 Md. 643, 651-652 n.5, 843 A.2d 78, 83-84 n.5 (2004); Chambco v. Urban Masonry, 338 Md. 417, 420-421, 659 A.2d 297, 299 (1995); Frericks v. General Motors Corp., 274 Md. 288, 296-297, 336 A.2d 118, 123 (1975). We do not intend to indicate any particular view on this choice of law issue. Furthermore, we do not suggest that there is a significant difference between Maryland scope of employment law and the law elsewhere. Nonetheless, we shall for purposes of this case accept the parties assumption that Maryland scope of employment principles are controlling. -12 The general test set forth in numerous Maryland cases for determining if an emp loyee 's tortious acts were within the scope of his employment is whether they were in furtherance of the emp loyer 's business and were authorized by the employer. In an often-quoted passage, the Court in Hopkins C. Co. v. Read Drug & C. Co., 124 Md. 210, 214, 92 A. 478, 479-480 (1914), explained: The simple test is whether they were acts within the scope of his employme nt; not whether they were done while prosecuting the mas ter's business, but whether they were done by the servant in furtherance thereof, and were such as may fairly be said to have been authorized by him. By authorized is not meant authority expressly conferred, but whether the act was such as was incident to the performance of the duties entrusted to him by the master, even though in opposition to his express and positive orders. *** In applying this test, there are f e w, if any, absolu tes. Nevertheless, various considerations may be pertinent. The Court, in E. Coast Lines v. M. & C.C. of Balto ., supra, 190 Md. at 285, 58 A.2d at 304, summarized four of them: To be within the scope of the employment the conduct must be of the kind the servant is employed to perform and must occur during a period not unreason ably disconnected from the authorized period of employment in a locality not unreasonably disconnected from the authorized area, and actuated at least in part by a purpose to serve the master. Mechem on Agency, Section 36; Huffcut on Agency, Section 5; American Law Institute, Restatem ent, Agency, Section 228, comment (b). In A. & P. Co. v. Noppenberger, 171 Md. 378, 390-391, 189 A. 434, 440 (1937), after setting forth the factors quoted above, the Court went on to quote with approval the Restatement of Agency § 229 (1933), as follows: O n the other hand, certain conduct of the servant may be within the scope of his employme nt, although not intended or consciou sly authorized by the master, but (1) To be -13within the scope of the employme nt, conduct must be of the same general nature as that authorized, or incidental to the conduct authorized. (2) In determining whether or not the conduct, although not authorized, is nevertheless so similar to or incidental to the conduct authorized as to be within the scope of employme nt, the following matters of fact are to be considered: (a) whether or not the act is one commo nly done by such servants; (b) the time, place and purpose of the act; (c) the previous relations between the master and the servant; (d) the extent to which the business of the master is apportioned between different servants; (e) whether the act is outside the enterprise of the master or, if within the enterprise, has not been entrusted to any servant; (f) whether or not the master has reason to expect that such an act will be done; (g) the similarity in quality of the act done to the act authorized; (h) whether or not the instrumen tality by which the harm is done has been furnished by the master to the servant; (i) the extent of departure from the normal method of accomplishing an authorized result, and (j) whether or not the act is seriously crimina l. Id., 229. *** In addition, an important factor is whether the emp loyee 's conduct was expectable or forese eable. Cox v. Prince Geor ge's County , 296 Md. 162, 171, 460 A.2d 1038, 1042 (1983). . . . In light of the above principles, it is clear that John Tayl or s facsimile advertising activities were outside the scope of his employment with Digi-Tel. If Digi-Tel sales representatives had been generall y authorized to create advertisem ents and hire a company to disseminate them to the public, the fact that Taylor s specific conduct had been unauthorized might not be sufficient to render that conduct outside of the scope of his employme nt. Taylor s lack of auth ority, however, extended beyond the creation and broadcast of unsolicited facsimile advertisements. -14According to the uncontradicted statements of Digi-Tel s President, Taylor s duties do not include creating or placing advertisem ents for Digi-T el. Taylor confirmed this, stating that [m]y duties do not include creating or placing advertisem ents for Digi-T el. Moreover, Taylor did not have authority to enter into contracts on Digi-Tel s behalf . Digi-Tel s personnel generally were not authorized to create advertisem ents because of Digi-Tel s contract with Nextel. Instead, Digi-Tel used advertising materials created by Nextel. Furthermore, the placing of advertisements, even by Digi-Tel s Director of Marketing, required the approval by one of three Digi-Tel officers. In a broad sense, the creation of advertising materials and the engagement of a company to dissemina te them were not incident to the performance of the duties entrusted to Taylor, Hopkins C. Co. v. Read Drug & C. Co., 124 Md. 210, 214, 92 A. 478, 480 (1914). Taylor s conduct was not comm only done by Digi-Tel sales representatives and was not expectab le or foreseeable by the employer. Sawyer v. Humphries, supra, 322 Md. at 256, 587 A.2d at 471 (internal quotation marks omitted). In arguing that Taylor s conduct was authorized, the petitioner Felland asserts that [n]o business records support the claim that fax advertising [by sales representatives] was prohib ited. (Petitioner s brief at 30). Nonetheless, the affidavits by the President of Digi-Tel and by John Taylor, as well as Taylor s deposition testim ony, do show that fax advertising by sales representatives was prohibited. In addition, Taylor testified that he had read a Digi-Tel document prohibiting faxes sent -15to anyone except to your own customers that you have already. Digi-Tel s written contract with Nextel also confirms the limitations upon Digi-Tel s advertising. Felland further relies on the fact that the employment contract between Digi-Tel and Taylor did not prohibit[] fax advertis ing. (Petitioner s brief at 32). It is also true that the employment contr act did not authorize fax advertising. Even if the employment contract had stood alone, no reasonab le inference either way could be drawn from the contract s silence. In light of the other evidence demonstrating the limitations upon advertising by sales representatives, it would be particularly unreason able to draw an inference from the employment contract s silence that sales representatives were authorized to engage in the type of fax advertising involved in this case. While a grant of summary judgment is improper when the facts are susceptible to inferences supporting the position of the party opposing summary judgm ent, nevertheless [t]hose inferences . . . must be reasonab le ones. Clea v. City of Baltimore, 312 Md. 662, 677-678, 541 A.2d 1303, 1310 (1988) (emphas is in original). See also Beatty v. Trailmaster, 330 Md. 726, 738-739, 625 A.2d 1005, 1011 (1993). The inference which Felland draws from the silence in the employment contract is simply not a reasonab le one. Felland suggests that Taylor s fax advertising was authorized because of the prior fax advertising by Digi-Tel described in the affidavit of Mr. Murp hy. (Petitioner s brief at 32). The Murphy affidavit, however, did not create a genuine and relevant factual dispute. It was not based on personal knowledge and, therefore, did -16not qualify under the summary judgment rule, Maryland Rule 2-501(c). It was vague, consisted of unsupported general statements, and related to a time period prior to Taylor s employment with Digi-Tel. See Arroyo v. Board of Education, 381 Md. 646, 654-655, 851 A.2d 576, 581 (2004), where Judge Cathell for the Court recently explained (internal quotation marks omitted): Thus, once the moving party has provided the court with sufficient grounds for summary judgmen t, the non-moving party must produce sufficient evidence to the trial court that a genuine dispute as to a material fact exists. See, e.g., Hoffman Chevro let, Inc. v. Washington County Nat l Sav. Bank, 297 Md. 691, 712, 467 A.2d 758, 769 (1983). This requires produc[ing] facts under oath, based on the personal knowledge of the affiant to defeat the motion. Bald, unsupported statements or conclusions of law are insuff icient. Con sequ ently, Felland did not generate a legitimate factual dispute concerning scope of employme nt. John Taylor s creation and dissemination of facsimile advertisem ents went beyond the scope of his employment with Digi-Tel. JUDGMENT AFFIRMED, WITH COSTS.

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