The opinion of the court was delivered by: Shadur, Senior District Judge.
MEMORANDUM OPINION AND ORDER
On November 17, 1998 The Home Insurance Company ("Home") filed
this action seeking a declaration that it has no duty to
indemnify Three I Truck Line, Inc. ("Three I") with respect to
two consolidated personal injury lawsuits filed against Three I
in the Circuit Court of Cook County, Illinois. Home had not
included a choice of law provision in the liability insurance
policy it had issued to Three I. In response to this Court's
recent directive for simultaneous filings by the litigants, each
party has now submitted its memorandum as to whether Iowa or
Illinois law should be applied to Home's contract claim against
Three I.*fn1
Although Three I also adverts to a possible choice of law
question with regard to its tort counterclaims, it admits that
there is no conflict between Illinois and Iowa law on those tort
issues.*fn2 In that
regard Seventh Circuit case law teaches the "false conflict"
doctrine, in which an identity of substantive law between
competing jurisdictions renders it unnecessary to deal with
choice of law issues at all (see, e.g., the seminal treatment of
that subject in this Circuit, In re Air Crash Disaster,
644 F.2d 594, 605 & n. 2 (7th Cir. 1981), and the pungent expression
of the same notion in Barron v. Ford Motor Co., 965 F.2d 195,
197 (7th Cir. 1992) ("before entangling itself in messy issues of
conflict of laws a court ought to satisfy itself that there
actually is a difference between the relevant laws of the
different states")).
Despite Home's and Three I's arguments to the contrary,
analysis discloses that there is also no substantive difference
between Iowa and Illinois law as to the contract claim.*fn3 Home
contends that it owes no indemnity obligation to Three I under
its policy because Three I failed to give timely notice of the
actions asserting serious personal injury claims. Home argues
that Illinois law should apply to that issue, whereas Three I
urges the application of Iowa law.
Three I points to only one possible difference between Illinois
and Iowa law on the contract claim issue, while Home's memorandum
assumes that there are differences without elaborating on what
they might be. Three I says that under Iowa law the absence of
prejudice to Home from a failure to notify it of the personal
injury claims disposes of any inadequate-notice defense. Under
Illinois law, according to Three I, such absence of prejudice to
the insurer is merely one of several factors to be considered in
deciding whether an alleged breach of a notice provision will
preclude recovery. Three I cites American States Ins. Co. v.
National Cycle, Inc., 260 Ill. App.3d 299, 311, 197 Ill.Dec. 833,
631 N.E.2d 1292, 1300-01 (1st Dist. 1994) for that proposition.
But that more general characterization has been overtaken by
two more recent decisions — Rice v. AAA Aerostar, Inc.,
294 Ill. App.3d 801, 807-08, 229 Ill.Dec. 20, 690 N.E.2d 1067, 1072
(4th Dist. 1998) and Illinois Founders Ins. Co. v. Barnett,
304 Ill. App.3d 602, 611, 237 Ill.Dec. 605, 710 N.E.2d 28, 35 (1st
Dist. 1999) that, unlike such cases as American States,
distinguish between the requirements of notice to the insurer of
(1) an occurrence that may potentially create the need for
policy coverage as against (2) a lawsuit that triggers such
coverage. Where the latter is in issue, as is true here, those
cases teach that Illinois law is in sync with Iowa law (Illinois
Founders, 304 Ill.App.3d at 611, 237 Ill.Dec. 605, 710 N.E.2d at
35):
When notice of the lawsuit is the issue, the rule is
that the insurer is required to show that it was
prejudiced by the insured's omission or delay in
order to escape liability on its policy.
This Court of course recognizes that Illinois state law is
whatever the Illinois state courts say it is. As State Farm Fire
& Cas. Co. v. Yapejian, 152 Ill.2d 533, 539, 178 Ill.Dec. 745,
605 N.E.2d 539, 542 (1992) has held:
Accord, In re A.A., 181 Ill.2d 32, 36, 228 Ill.Dec. 905,
690 N.E.2d 980, 982 (1998). And this Court has consistently ruled
that its role is identical to that of its state trial court
counterparts, so that this Court too must adhere to the dictates
of the Illinois Appellate Courts. Moreover, there is nothing to
hint that the Illinois Supreme Court, if confronted with the
issue, would not resolve it in the same way as the two Appellate
Districts.
It is true that unlike the cited Illinois cases, Iowa places
the burden of proving the absence of prejudice on the insured
(Fireman's Fund Ins. Co. v. ACC Chem. Co., 538 N.W.2d 259, 265
(Iowa 1995)). But there is no basis for believing that such a
procedural difference would be outcome-determinative in this case
(after all, burdens of proof are typically tiebreakers in
situations where the total absence of evidence on an issue leaves
it in equilibrium, and nothing from either party suggests that
may be the case here). Hence a false conflict exists between the
two states' laws, and this Court will apply Illinois law to all
issues involved in the contract claim in this action.
In light of the "false conflict" concept previously discussed,
this Court will apply Illinois law to all contract law issues.
And given the absence of any identified differences in tort law
as between Iowa and Illinois, and given the greater abundance of
Illinois decisions and the greater working familiarity of all
counsel and this Court ...