**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

1 HOME LENDING CORPORATION )

D.B.A. CAPITAL LINE FINANCIAL, LLC. ) File No. EB-03-TC-031

) NAL/Acct. No. 200732170002

Apparent Liability for Forfeiture ) FRN: 0015635519

## NOTICE OF APPARENT LIABILITY FOR FORFEITURE

**Adopted: October 20, 2006 Released: October 20, 2006**

By the Chief, Enforcement Bureau:

**I. INTRODUCTION**

1.  In this Notice of Apparent Liability for Forfeiture ("NAL"),[^1] we
    find that 1 Home Lending Corporation d.b.a. Capital Line Financial,
    LLC ("Capital Line")[^2] apparently willfully or repeatedly violated
    section 227 of the Communications Act of 1934, as amended ("Act"),
    and the Commission's rules and orders by delivering at least four
    unsolicited, prerecorded advertising messages to three
    consumers.[^3] Based on the facts and circumstances surrounding
    these apparent violations, we find that Capital Line is apparently
    liable for a forfeiture in the amount of \$18,000.

**II. BACKGROUND**

2.  On April 22, 2003, in response to consumer complaints alleging that
    Capital Line had delivered unsolicited, prerecorded advertising
    messages to several consumers, the Commission staff issued a
    citation to Capital Line pursuant to section 503(b)(5) of the Act.
    [^4] The staff cited Capital Line for delivering one or more
    prerecorded, unsolicited advertisements to a residential telephone
    line, in violation of section 227 of the Act and the Commission\'s
    rules and orders.[^5] According to the complainants, the unsolicited
    advertisements offered information concerning home loans.[^6] The
    citation, which the staff served by certified mail, return receipt
    requested, informed Capital Line that subsequent violations could
    result in the imposition of monetary forfeitures of up to \$11,000
    per violation and included a copy of the consumer complaints that
    formed the basis of the citation. The citation informed Capital Line
    that within 30 days of the date of the citation, it could either
    request a personal interview at the nearest Commission field office,
    or could provide a written statement responding to the citation.

3.  Capital Line filed a written response to the citation on May 21,
    2003,[^7] arguing that it placed calls only to established customers
    of its title company subsidiary. Capital Line did not, however,
    provide any evidence of an established business relationship ("EBR")
    with any of the complainants whose complaints formed the basis of
    the citation.[^8] On May 13, 2005, Capital Line filed a supplemental
    response in which it requested that the Commission rescind the
    citation.[^9] To support its request, Capital Line attached a
    decision from the Superior Court of California, which had dismissed
    a claim, filed by one of the citation complainants, for private
    damages under the TCPA.[^10] Capital Line argued that the Commission
    should rescind the citation because the California court had found
    an EBR between the complainant and an affiliate of Capital
    Line.[^11] We are not, however, bound by that court's decision
    regarding that complainant's relationship with Capital Line.[^12]
    Furthermore, Capital Line did not provide any independent evidence
    of an EBR with that complainant or with the other two complainants
    whose complaints formed part of the basis for the citation.[^13]
    Accordingly, the citation was not rescinded, nor is there any reason
    to rescind it now.

4.  Despite the citation's warning that subsequent violations could
    result in the imposition of monetary forfeitures, the Commission has
    received subsequent consumer complaints indicating that Capital Line
    apparently continued to send illegal prerecorded, unsolicited
    advertisements after receiving the citation.[^14] As discussed
    below, we base our action here on this information from consumers
    alleging that Capital Line sent unsolicited prerecorded advertising
    messages after the date of the citation, and that the messages did
    not qualify for any exemption from the prohibition imposed by our
    rules. In sum, despite prior warning, Capital Line has continued to
    engage in the same unlawful conduct since the April 2003 citation.

**III. DISCUSSION**

A.  **Violations of the Commission's Rules Restricting Prerecorded
    Messages**

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5.  Section 227(b)(1)(B) of the Act prohibits any person from initiating
    "any telephone call to any residential telephone line using an
    artificial or prerecorded voice to deliver a message without the
    prior express consent of the called party, unless the call is
    initiated for emergency purposes or is exempted by rule or order of
    the Commission."[^15] Section 64.1200(a)(2) of the Commission's
    rules provides exemptions for calls: 1) made for emergency
    purposes; 2) made for non-commercial purposes; 3) made for
    commercial purposes that do "not include or introduce an unsolicited
    advertisement[^16] or constitute a telephone solicitation";[^17] 4)
    to persons "with whom the caller has an established business
    relationship[^18] at the time the call is made"; and 5) "made by or
    on behalf of a tax-exempt nonprofit organization."[^19]

6.  As explained above, Capital Line initiated prerecorded messages that
    invited consumers to consider taking out a Capital Line home
    mortgage loan. For example, one of the messages first informed the
    consumer that Capital Line "just obtained the lowest start rate in
    the mortgage loan industry in over 40 years of 1.5%."[^20] The
    message then went on to invite the consumer to "\[g\]ive us a call .
    . . \[w\]e're open 7 days a week . . . our loans have no up front
    fees, no out of pocket costs and you can actually skip the first
    month of your mortgage payments."[^21] Based on the record before
    us, we find that the prerecorded messages at issue here were not
    made for any emergency or non-commercial purposes, and were not on
    behalf of a tax-exempt, nonprofit organization, but were commercial
    in nature and included or introduced "unsolicited advertisements" or
    constituted "telephone solicitations."[^22]

7.  The record also indicates that Capital Line did not have the prior
    express consent of the recipients of these prerecorded messages to
    deliver the unsolicited advertising messages or telephone
    solicitations. Further, Capital Line has provided neither argument
    nor evidence in response to our citation to prove tax-exempt
    nonprofit status. Therefore, based on the evidence in the record,
    including the complainants' affidavits, we find that the prerecorded
    messages were unsolicited advertisements or telephone solicitations
    that were prohibited by section 227(b)(1)(B) of the Act[^23] and
    Section 64.1200(a)(2)[^24] of the Commission's rules.

**B. Proposed Forfeiture**

8.  We conclude that Capital Line apparently willfully or repeatedly
    violated the Act and the Commission\'s rules and orders by
    delivering unsolicited, prerecorded advertising messages. Capital
    Line apparently did not cease its unlawful conduct even after the
    Commission staff issued a citation warning that it was engaging in
    unlawful conduct and could be subject to monetary forfeitures.
    Accordingly, a proposed forfeiture is warranted against Capital Line
    for its apparent willful or repeated violations of section 227 of
    the Act and of the Commission\'s rules and orders regarding
    restrictions on telephone solicitations.

9.  Section 503(b) of the Act authorizes the Commission to assess a
    forfeiture of up to \$11,000 for each violation of the Act or of any
    rule, regulation, or order issued by the Commission under the Act by
    a non-common carrier or other entity not specifically designated in
    section 503 of the Act.[^25] In exercising such authority, we are to
    take into account \"the nature, circumstances, extent, and gravity
    of the violation and, with respect to the violator, the degree of
    culpability, any history of prior offenses, ability to pay, and such
    other matters as justice may require.\"[^26]

10. Although the Commission\'s Forfeiture Policy Statement does not
    establish a base forfeiture amount for violating the prohibition on
    delivering unsolicited, prerecorded advertising messages to a
    residential telephone line, we have found these violations to be
    similar in nature to violating the prohibition on delivering
    unsolicited advertisements to telephone facsimile machines. In
    *Warrior Custom Golf*,[^27] we considered \$4,500 per prerecorded
    advertising message to be an appropriate base amount,[^28] and we
    apply that amount to each of the four apparent unsolicited,
    prerecorded advertising violations evidenced by the complaints.[^29]
    This results in a proposed total forfeiture of \$18,000. Capital
    Line shall have the opportunity to submit evidence and arguments in
    response to this Notice of Apparent Liability for Forfeiture to show
    that no forfeiture should be imposed or that some lesser amount
    should be assessed.[^30]

#### IV. CONCLUSION AND ORDERING CLAUSES

11. We have determined that 1 Home Lending Corporation d.b.a. Capital
    Line Financial, LLC apparently violated section 227 of the Act and
    the Commission's related rules and orders by delivering the
    unsolicited, prerecorded advertising messages identified above. We
    have further determined that 1 Home Lending Corporation d.b.a.
    Capital Line Financial, LLC is apparently liable for a forfeiture in
    the amount of \$18,000.

12. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 503(b), and
    section 1.80 of the Commission's rules, 47 C.F.R. § 1.80, and under
    the authority delegated by sections 0.111 and 0.311 of the
    Commission's rules, 47 C.F.R. §§ 0.111, 0.311, that 1 Home Lending
    Corporation d.b.a. Capital Line Financial, LLC is hereby NOTIFIED of
    an APPARENT LIABILITY FOR FORFEITURE in the amount of \$18,000 for
    willful or repeated violations of section 227(b)(1)(B) of the Act,
    47 U.S.C. § 227(b)(1)(B), section 64.1200(a)(2) of the Commission's
    rules, 47 C.F.R. § 64.1200(a)(2), and the related orders described
    in the paragraphs above.

13. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
    Commission's rules,[^31] within thirty (30) days of the release date
    of this *Notice of Apparent Liability for Forfeiture*, 1 Home
    Lending Corporation d.b.a. Capital Line Financial, LLC SHALL PAY the
    full amount of the proposed forfeiture or SHALL FILE a written
    statement seeking reduction or cancellation of the proposed
    forfeiture.

14. Payment by check or money order, payable to the order of the
    "Federal Communications Commission," may be mailed to Forfeiture
    Collection Section, Finance Branch, Federal Communications
    Commission, P.O. Box 358340, Pittsburgh, Pennsylvania 15251. Payment
    by overnight mail may be sent to Mellon Client Service Center, 500
    Ross Street, Room 670, Pittsburgh, Pennsylvania 15262-0001, Attn:
    FCC Module Supervisor. Payment by wire transfer may be made to: ABA
    Number 043000261, receiving bank Mellon Bank, and account number
    911-6229. The payment should note NAL/Acct. No. 200732170002.

15. The response, if any, must be mailed to the Office of the Secretary,
    Federal Communications Commission, 445 12^th^ Street, S.W.,
    Washington, D.C. 20554, ATTN: Enforcement Bureau --
    Telecommunications Consumers Division, and must include the
    NAL/Acct. No. referenced in the caption.

16. The Commission will not consider reducing or canceling a forfeiture
    in response to a claim of inability to pay unless the petitioner
    submits: (1) federal tax returns for the most recent three-year
    period; (2) financial statements prepared according to generally
    accepted accounting practices ("GAAP"); or (3) some other reliable
    and objective documentation that accurately reflects the
    petitioner's current financial status. Any claim of inability to pay
    must specifically identify the basis for the claim by reference to
    the financial documentation submitted.

17. Requests for payment of the full amount of this *Notice of Apparent
    Liability for Forfeiture* under an installment plan should be sent
    to: Chief, Revenue and Receivables Operations Group, 445 12th
    Street, S.W., Washington, D.C. 20554.[^32]

18. IT IS FURTHER ORDERED that a copy of this *Notice of Apparent
    Liability for Forfeiture* shall be sent by first class mail and
    certified mail return receipt requested to 1 Home Lending
    Corporation d.b.a. Capital Line Financial, LLC in care of Mr.
    William E. Raney, Esq., Copilevitz & Canter, LLC, 423 W. Eighth
    Street, Suite 400, Kansas City, Missouri 64105; to 1 Home Lending
    Corporation d.b.a. Capital Line Financial, LLC, Attention:
    William J. Tessar, 23925 Park Sorrento, Suite 200, Calabasas, CA
    91302-4010; and to 1 Home Lending Corporation d.b.a. Capital Line
    Financial, LLC, Attention: William J. Tessar, 22801 Ventura
    Boulevard, #205, Woodland Hills, CA 91367.

FEDERAL COMMUNICATIONS COMMISSION

Kris Anne Monteith

Chief

Enforcement Bureau

[^1]: 47 U.S.C. § 503(b)(1). The Commission has the authority under this
    section of the Act to assess a forfeiture against any person who has
    \"willfully or repeatedly failed to comply with any of the
    provisions of this Act or of any rule, regulation, or order issued
    by the Commission under this Act \....\"; *see also* [47 U.S.C. §
    503(b)(5)](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS503&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw)
    (stating that the Commission has the authority under this section of
    the Act to assess a forfeiture penalty against any person who is not
    the holder of a Commission authorization so long as (A) such person
    is first issued a citation of the violation charged; (B) is given a
    reasonable opportunity for a personal interview with an official of
    the Commission, at the field office of the Commission nearest to the
    person\'s place of resident; and (C) subsequently engages in conduct
    of the type described in the citation).

[^2]: According to publicly available information, Capital Line
    Financial, LLC, also listed as 1 Home Lending Corporation, is
    headquartered at 23925 Park Sorrento, Suite 200, Calabasas, CA
    91302-4010; a branch address is listed at 22801 Ventura Boulevard,
    #205, Woodland Hills, CA 91367. Therefore, all references to
    "Capital Line" in this NAL encompass 1 Home Lending Corporation as
    well as Capital Line Financial, LLC. Capital Line's agent for
    service of process is William J. Tessar. Daniel Shields is listed as
    president; Paul Joseph Karl is listed as designated officer; Glen
    Podell is listed as financial executive and owner. Accordingly, all
    references in this NAL to "Capital Line" also encompass William J.
    Tessar, Daniel Shields, Paul Joseph Karl, Glen Podell, and all other
    principals and officers of the entity, as well as the corporate
    entity itself.

[^3]: *See* [47 U.S.C.
    §](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS227&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw)
    [227(b)(1)(B)](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS227&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw);
    [47 C.F.R. §
    64.1200(a)(2)](http://web2.westlaw.com/find/default.wl?DB=1000547&DocName=47CFRS64.1200&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw).
    Throughout this NAL, we will be citing the Commission's rules as
    they existed at the time of the violations; *see also Rules and
    Regulations Implementing the Telephone Consumer Protection Act of
    1991*, CG Docket No. 02-278, Report and Order, 18 FCC Rcd 14014
    (2003) (*TCPA Report and Order*).

[^4]: *See* Citation from Kurt A. Schroeder, Deputy Chief,
    Telecommunications Consumers Division, Enforcement Bureau, issued to
    Capital Line on April 22, 2003.

[^5]: *See* 47 U.S.C. § 503(b)(5) (authorizing the Commission to issue
    citations to non-common carriers for violations of the Act or of the
    Commission\'s rules and orders).

[^6]: *See* Complaints from Michele Robinson, Barbara Schneider, and
    Richard Stahl, requesting Commission action against Capital Line,
    which were attached to the citation.

[^7]: *See* Letter from William Raney, Copilevitz & Canter, LLC
    (representing Capital Line), to Kurt Schroeder, Deputy Chief,
    Telecommunications Consumers Division, Enforcement Bureau, FCC,
    dated May 21, 2003.

[^8]: *See* n.Error: Reference source not found, *supra*.

[^9]: *See* Letter from William Raney, Copilevitz & Canter, LLC
    (representing Capital Line), to Kurt Schroeder, Deputy Chief,
    Telecommunications Consumers Division, Enforcement Bureau, FCC,
    dated May 10, 2005 ("*Supplemental Response*").

[^10]: *See* 47 U.S.C. § 227(b)(3) (allowing a person or entity to
    bring, subject to the laws or rules of the State court, an action in
    State court for monetary damages resulting from violations of the
    Telephone Consumer Protection Act of 1991).

[^11]: *See Supplemental Response*, Attachment. The Court did not
    require Capital line to pay damages for sending the prerecorded
    message to Ms. Schneider because of an alleged established business
    relationship between her and an alleged affiliate of Capital Line,
    "Countrywide." In particular, the Court found that Countrywide had
    provided the first mortgage to Ms. Schneider's residential property.
    *Id*.

[^12]: *See Citibank, N. A., v. Graphic Scanning Corp. and Graphnet
    Systems, Inc.*, 618 F.2d 222, 225 (2^nd^ Cir. 1980) (state court
    determination that a contract was not void for illegality was not
    binding on the FCC, nor did the court's determination preclude a
    claim before the FCC that the contract was illegal due to a
    violation of the Communications Act).

[^13]: *See* n.Error: Reference source not found, *supra*.

[^14]: *See* the following consumer complaints requesting Commission
    action: 1) Complaint of Richard Horn, filed October 25, 2005, and
    December 14, 2005 (received prerecorded messages on October 25,
    2005, and December 14, 2005); 2) complaint of Mark Klein, filed
    January 24, 2006 (received prerecorded message on January 4, 2006);
    3) complaint of Kirby Beall, filed February 16, 2006 (received
    prerecorded message on February 16, 2006). Each of the complainants
    signed declarations stating that the messages they received
    advertised Capital Line's home loans, and that they did not have
    established business relationships with Capital Line.

[^15]: 47 U.S.C. § 227(b)(1)(B).

[^16]: "Unsolicited advertisement" means "any material advertising the
    commercial availability or quality of any property, goods, or
    services which is transmitted to any person without that person's
    prior express invitation or permission." 47 C.F.R. § 64.1200(f)(10).

[^17]: "Telephone solicitation" means "the initiation of a telephone
    call or message for the purpose of encouraging the purchase or
    rental of, or investment in, property, goods, or services, which is
    transmitted to any person," but "does not include a call or message:
    (i) to any person with that person's prior express invitation or
    permission; (ii) to any person with whom the caller has an
    established business relationship; or (iii) by or on behalf of a
    tax-exempt nonprofit organization." 47 C.F.R. § 64.1200(f)(9).

[^18]: An "established business relationship" is defined as "a prior or
    existing relationship formed by a voluntary two-way communication
    between a person or entity and a residential subscriber with or
    without an exchange of consideration, on the basis of the
    subscriber's purchase or transaction with the entity within the
    eighteen (18) months immediately preceding the date of the telephone
    call or on the basis of the subscriber's inquiry or application
    regarding products or services offered by the entity within the
    three months immediately preceding the date of the call, which
    relationship has not been previously terminated by either party." 47
    C.F.R. § 64.1200(f)(3).

[^19]: 47 C.F.R. § 64.1200(a)(2).

[^20]: *See* complaint of Mark Klein, filed January 24, 2006.

[^21]: *Id.*

[^22]: *TCPA Report and Order*, 18 FCC Rcd at 14097-98, para. 140.

[^23]: 47 U.S.C. § 227(b)(1)(B).

[^24]: 47 C.F.R. § 64.1200(a)(2).

[^25]: Section 503(b)(2)(C) provides for forfeitures up to \$10,000 for
    each violation in cases not covered by subparagraph (A) or (B),
    which address forfeitures for violations by licensees and common
    carriers, among others. *See* 47 U.S.C. § 503(b). In accordance with
    the inflation adjustment requirements contained in the Debt
    Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001, 110
    Stat. 1321, the Commission implemented an increase of the maximum
    statutory forfeiture under section 503(b)(2)(C) to \$11,000. *See*
    47 C.F.R. §1.80(b)(3); *Amendment of Section 1.80 of the
    Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
    Inflation*, 15 FCC Rcd 18221 (2000); *see also* *Amendment of
    Section 1.80(b) of the Commission's Rules and Adjustment of
    Forfeiture Maxima to Reflect Inflation*, 19 FCC Rcd 10945 (2004)
    (this recent amendment of section 1.80(b) to reflect inflation left
    the forfeiture maximum for this type of violator at \$11,000).

[^26]: 47 U.S.C. § 503(b)(2)(D); *The Commission's Forfeiture Policy
    Statement and Amendment of Section 1.80 of the Rules to Incorporate
    the Forfeiture Guidelines*, Report and Order, 12 FCC Rcd 17087,
    17100-01, para. 27 (1997), recon. denied, 15 FCC Rcd 303 (1999).

[^27]: *Warrior Custom Golf, Inc*., Notice of Apparent Liability for
    Forfeiture, 19 FCC Rcd 23648 (Enf. Bur. 2004) ("*Warrior Custom
    Golf*") (first *NAL* to address prerecorded advertising messages).

[^28]: *See Warrior Custom Golf*, 19 FCC Rcd at 23652, para. 10 (citing
    *Get-Aways, Inc*., Notice of Apparent Liability for Forfeiture, 15
    FCC Rcd 4843 (2000); *Tri-Star Marketing, Inc.,* Notice of Apparent
    Liability for Forfeiture, 15 FCC Rcd 11295 (2000); [*Tri-Star
    Marketing, Inc.,* Forfeiture Order, 15 FCC Rcd 23198 (2000);
    *Carolina Liquidators, Inc.,* Notice of Apparent Liability for
    Forfeiture, 15 FCC Rcd 16837 (2000); *Carolina Liquidators, Inc.,*
    Forfeiture Order, 15 FCC Rcd 21775 (2000); *21^st^ Century Fax
    Ltd.,* Notice of Apparent Liability for Forfeiture, 15 FCC Rcd 24406
    (2000); *21^st^ Century Fax Ltd.,* Forfeiture Order, 17 FCC Rcd 1384
    (2002)](http://web2.westlaw.com/find/default.wl?DB=1016&SerialNum=2000385664&FindType=Y&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw));
    *see also* *Septic Safety, Inc.,* Forfeiture Order, 21 FCC Rcd 6868,
    6872, paras. 10-11 (Enf. Bur. 2006).

[^29]: *See* n.Error: Reference source not found, *supra*.

[^30]: *See* [47 U.S.C. §
    503(b)(4)(C)](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS503&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw);
    [47 C.F.R. §
    1.80(f)(3)](http://web2.westlaw.com/find/default.wl?DB=1000547&DocName=47CFRS1.80&FindType=L&AP=&RS=WLW4.05&VR=2.0&FN=_top&SV=Split&MT=Westlaw).

[^31]: 47 C.F.R. § 1.80.

[^32]: 47 C.F.R. § 1.1914.