The opinion of the court was delivered by: David H. Coar United States District Judge
MEMORANDUM OPINION AND ORDER
Before this Court are parties' cross-motions for summary judgment and Defendants' Motion to Strike Paragraphs 6 and 10 of the Affidavit of Monika McCarthy. Background Facts Plaintiff New Century Mortgage Corporation ("NCMC") purchased a commercial general liability insurance policy (CGL) from Great Northern Insurance Company and an excess coverage policy from Federal Insurance. The Great Northern policy had primary policy number 3539-77-36 and provided a $1 million liability limit for each occurrence or offense. Federal's commercial umbrella policy, number 7977-03-85, provided a limit of $20 million per occurrence or offense. These policies had an effective period of February 3, 2002 through February 3, 2003. The policies provide coverage for both "property damage" and "advertising injury."
In June 2001, Plaintiff New Century Mortgage Corporation contracted with Fax.com, a fax broadcast service provider, to broadcast advertisements for NCMC's loan services via fax. At least 200,000 faxes were transmitted under this contract. In April 2002, an Illinois resident filed a class action complaint against NCMC in Illinois state court ("the Bernstein action") for violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA"), and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 ("ICFA").
NCMC tendered the class action complaint to Great Northern and Federal on August 15, 2003, who agreed to defend against the suit subject to a reservation of rights. Great Northern notified NCMC, however, that it believed the allegations in the class action fell outside the insurance agreement and any coverage definitions. Specifically, Defendants admitted the claim in the Bernstein action potentially fell within their advertising injury and property damage coverage. Defendants, however, reserved rights because they contended that the Bernstein claims did not satisfy the policy definitions of advertising injury or property damage. In addition, Defendants asserted that the "willful violation" and "expected or intended injury" exclusions precluded coverage under the policies.
On September 30, 2003, Bernstein filed a second amended complaint, re-alleging violations of the TCPA and ICFA, and also asserting claims under Illinois common law for conversion and property damage. The plaintiff class alleged that they lost use of paper, toner and ink when they received the allegedly unsolicited faxes, and that this loss constituted damages under the TCPA. The Illinois state court dismissed the plaintiff's ICFA claim with leave to amend and dismissed the common law property damage claim with prejudice, stating that property damage is an element of intentional or negligent tortious conduct, not a freestanding tort. It denied a motion to dismiss the TCPA claim.
In May 2004, NCMC entered settlement talks with the class representative in the class action suit. NCMC asked Defendants to participate in the settlement discussions but defendants declined to do so. According to NCMC, its potential liability in the Bernstein action was in excess of $300 million. NCMC forwarded a copy of a settlement demand from class counsel to Defendants in June 2004. Defendants informed NCMC that they would continue to defend NCMC but denied any duty to indemnify and refused to participate in a scheduled mediation session. In July 2004, Defendants informed NCMC that they "would not stand in the way" of a $6 million settlement, but again denied any obligation to fund it. The Bernstein plaintiff filed a third amended complaint in Illinois Circuit Court on August 16, 2004, alleging TCPA and ICFA violations, and asserting Illinois common law claims for conversion and trespass. The complaint alleged that the plaintiff was damaged by the loss of the toner and paper when he received NCMC's unsolicited fax advertisement, in violation of TCPA.
On December 8, 2004, NCMC entered a $1.95 million settlement in the class action lawsuit. The settlement covered all persons in the United States or its territories who received an unsolicited fax advertisement from NCMC after April 4, 1997. Defendants refused to contribute any amount toward the settlement. After all participating settlement class members were paid, the remainder of the settlement amount, approximately $1.085 million, was donated to eighteen different charities and non-profit organizations as designated in the settlement agreement.
NCMC then filed suit against Great Northern and Federal for indemnification in Minnesota state court. That suit was dismissed on forum non conveniens grounds. NCMC refiled in Illinois state court and Defendants removed to federal court. The parties have filed cross-motions for summary judgment which are presently pending before this Court. Defendants have also filed a motion to strike two paragraphs of the affidavit of Monika McCarthy.*fn1
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the initial burden to prove that no genuine issue of material fact exists. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). After the moving party makes its showing, the burden shifts to the nonmoving party to identify specific disputed issues of material fact that show there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
The construction of insurance policy provisions poses "questions of law to be decided by the court." Transamerica Ins. Co. v. South, 975 F.2d 321, 327 (7th Cir. 1992) (citation omitted). Under choice of law principles, the court applies the substantive law of the forum state. Jupiter Alum. Corp. v. Home Ins. Co., 225 F.3d 868, 873 (7th Cir. 2000). In Illinois, insurance contracts are construed according to the law of the state with "the most significant contacts" with the policy. The parties to the instant case agree that Illinois law applies.
A court's primary goal is to identify and give effect to the intentions of the parties as expressed through the words of the policy. Outboard Marine Corp. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204, 1212 (Ill. 1992).Thus, the court must construe the policy as a whole, giving due consideration to the risk assumed, the purpose of the entire contract, and the subject matter at issue. Outboard Marine, 607 N.E.2d at 1212. When an insurer relies on an exclusionary clause to deny coverage, that clause's applicability "must be clear and free from doubt." Id. (quoting Insurance Co. of Illinois v. Markogiannakis, 544 N.E.2d 1082, 1094 (Ill. App. Ct. 1989)). Under Illinois law, exclusionary clauses must be "narrowly construed." Id. at 1217. Policy terms that are susceptible of more than one meaning are "considered ambiguous and will be construed strictly against the insurer who drafted the policy." McKinney v. Allstate Ins. Co., 722 N.E.2d 1125, 1127 (Ill. 1999).
Defendants seek to strike two paragraphs of the affidavit of Monika McCarthy, senior vice president and general counsel for NCMC. They argue that McCarthy does not allege that she was involved in the discussions or actions described in the two paragraphs and has provided no factual support for her assertions. In addition, they contend that Frank Nese, NCMC's Director of Marketing, testified at his deposition that he "d[id] not recall" McCarthy participating in the relevant events and did not speak to her about them. McCarthy's affidavit states that she is "personally familiar with the facts set forth herein - except those matters [she has] attested to on information and belief." McCarthy Aff. ¶1. The record is not as ...