Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Landmark American Insurance Company v. Nip Group

December 5, 2011


Appeal from the Circuit Court of Cook County No. 09 CH 11005 Honorable William O. Maki, Judge Presiding.

The opinion of the court was delivered by: Justice Rochford

JUSTICE ROCHFORD delivered the judgment of the court, with opinion.

Presiding Justice Hoffman and Justice Lampkin concurred in the judgment and opinion.


¶ 1 Defendants, NIP Group, Inc. (NIP), and Lawrence Brodsky, have each appealed following an order entering summary judgment in favor of plaintiff, Landmark American Insurance Company (Landmark), in this action for declaratory judgment. Landmark's suit sought a declaration that it had no obligation to defend or indemnify NIP in an underlying class action lawsuit filed by Mr. Brodsky to recover for NIP's alleged practice of sending unsolicited advertisements via facsimile.

¶ 2 In his appeal (No. 1-10-1155), Mr. Brodsky asserts that the circuit court improperly applied Illinois rather than New Jersey law in its analysis, and that summary judgment in favor of Landmark was in any case improper under the law of either state. In its appeal (No. 1-10-1158), NIP also challenges the entry of summary judgment in favor of Landmark, but additionally asserts that the circuit court erred in denying its motions: (1) to dismiss for forum non conveniens; (2) to dismiss or stay the declaratory judgment action as being premature; and (3) requesting discovery for purposes of responding to Landmark's motion for summary judgment. These two appeals have now been consolidated, and for the following reasons we affirm in part, reverse in part, and remand for further proceedings.


¶ 4 This insurance coverage dispute arises out of a class action lawsuit Mr. Brodsky filed against NIP in the circuit court, styled Lawrence S. Brodsky, Individually, and as the Representative of a Class of Similarly-Situated Persons v. NIP Group, Inc., No. 08 CH 22051. In that suit, Mr. Brodsky generally alleged he was a Cook County resident and that NIP, a New Jersey insurance corporation with its principal place of business in New Jersey, had a practice of sending unsolicited fax advertisements for its insurance products and services. More specifically, Mr. Brodsky alleged NIP had sent him such advertisements on three separate occasions in 2008, and copies of those advertisements were attached to the complaint. Mr. Brodsky further asserted NIP had "faxed the same or similar advertisements to [himself] and more than 39 other recipients without first receiving the recipients' express permission or invitation."

¶ 5 The underlying complaint sought relief for Mr. Brodsky and the other proposed class members in three separate counts, pursuant to: (1) the federal Telephone Consumer Protection Act (TCPA) (47 U.S.C. § 227 (2006)); (2) the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2008)); and (3) a common law claim for conversion. NIP tendered the defense of Mr. Brodsky's suit to both its general liability insurer and Landmark, which had issued NIP a professional liability policy. While NIP's general liability insurer undertook the defense of Mr. Brodsky's suit under a reservation of rights, Landmark, an Oklahoma insurer with its principal place of business in Georgia, denied it had a defense or indemnity obligation and filed the instant declaratory judgment action against NIP. Mr. Brodsky was also named a defendant as a necessary party.

¶ 6 Attached to the complaint was a copy of the insurance policy Landmark issued to NIP. The policy provides NIP with "MISCELLANEOUS PROFESSIONAL LIABILITY COVERAGE" and contains the following relevant provisions:

"Part I. Insuring Agreement

A. Covered Services [Landmark] will pay on behalf of the Insured, as shown in the Declarations, all sums that the Insured becomes legally obligated to pay as Damages and associated Claim Expenses arising out of a negligent act, error or omission, Advertising Liability or Personal Injury, even if the Claim asserted is groundless, false or fraudulent, in the rendering or failure to render professional services as described in the Declarations *** [.]

B. Defense and Settlement [Landmark] will have the right and duty to defend any Claim against an Insured seeking Damages to which this policy applies, even if any of the allegations of the Claim are groundless, false or fraudulent. ***

Part II. Exclusions

This policy does not apply to any Claim or Claim Expenses based upon or arising out of:

L. False advertising or misrepresentation in advertising, but only regarding intentionally false, misleading, deceptive, fraudulent, or misrepresenting statements in advertising the insured's own product or service.

Part III. Definitions

A. Advertising Liability means injury arising out of one or more of the following offenses:

1. Oral or written publication of material that slanders or libels a person or organization or disparages a person's organization, products or services;

2. Oral or written publication of material that violates a person's right of privacy;

3. Misappropriation of advertising ideas or style of doing business." (Emphasis in original.)

¶ 7 With respect to those "professional services" for which NIP was provided coverage, the "Covered Services" portion of the "Insuring Agreement" refers to the declaration page of the policy, which in turn refers to a "BUSINESS DESCRIPTION ENDORSEMENT." Included in that endorsement is a list of NIP's professional services, without further specific definition, which were covered by the policy. That list included NIP's role as an insurance wholesaler, insurance managing general agent, insurance general agent, insurance underwriting manager, insurance program administrator, insurance agent, insurance broker, surplus lines insurance broker, insurance consultant, insurance claims administrator, insurance appraiser, and insurance premium financier.

¶ 8 Landmark's eight-count complaint asserted a number of reasons why it had no responsibilities with respect to the Brodsky complaint. Count I asserted that because the alleged sending of unsolicited fax advertisements did not constitute the "rendering or failure to render professional services" as described in the policy, there was no coverage for the Brodsky suit. The remaining counts raised various policy exclusions to insurance coverage, which among others included exclusions for damages caused by conversion, property damage, or intentional acts. Landmark also sought a declaration that its policy was excess to any of NIP's other insurance covering the Brodsky suit, and that it had no duty to indemnify NIP for certain specified damages.

¶ 9 Mr. Brodsky filed his answer, including affirmative defenses asserting that Landmark had waived or was estopped from raising any policy defenses due to its failure to defend NIP in the underlying suit. NIP, however, filed a motion to dismiss or stay Landmark's suit. NIP argued that, pursuant to Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187 (1976), the declaratory judgment action should be dismissed or stayed because resolution of this case would necessarily require the determination of factual matters at issue in the underlying litigation. Specifically, NIP asserted that any resolution of this action would improperly require a determination of whether NIP's alleged actions were intentional, amounted to conversion, or were part of an ongoing business relationship with the members of the class. NIP also asserted that any resolution of Landmark's indemnity obligation would be premature while the underlying litigation was still ongoing and no liability had yet been incurred.

¶ 10 The circuit court denied NIP's motion, and NIP subsequently filed its answer and affirmative defenses to Landmark's suit. Among those defenses were assertions that Landmark's failure to defend had resulted in any policy defenses being waived or barred by the doctrine of estoppel. NIP also contended that, because Landmark's policy specifically included coverage for "Advertising Liability," any argument that the Brodsky suit was not covered by the policy was against public policy and would improperly render that coverage illusory.

¶ 11 Just before NIP filed its answer and affirmative defenses, Landmark filed a motion for summary judgment. Landmark's motion relied solely on the allegations contained in count I of its complaint, i.e., that the unambiguous language of its policy established that sending unsolicited fax advertisements was not a "professional service," and, therefore, there was no coverage for the Brodsky suit. NIP obtained an order from the circuit court staying further briefing on this motion and permitting NIP to file a motion to dismiss for forum non conveniens. The motion argued that this case should be dismissed in favor of proceeding in a more appropriate forum, New Jersey. After briefing and argument, NIP's forum non conveniens motion was denied. At the hearing on this motion, the circuit court also granted Landmark leave to file an amended motion for summary judgment, entered a briefing schedule for that motion, and specifically denied NIP's oral request to engage in discovery before responding to the amended motion for summary judgment.

¶ 12 In its amended motion for summary judgment, Landmark again relied solely on its bare assertion that sending unsolicited fax advertisements was not a "professional service" under its policy. Landmark contended that Illinois law applied to this case, and its position was supported by the Second District's decision in Westport Insurance Corp. v. Jackson National Life Insurance Co., 387 Ill. App. 3d 408 (2008). In that case, the appellate court found that an insurance agent's practice of sending unsolicited fax advertisements was not covered under a professional liability insurance policy because such actions did not amount to a "professional service." Westport, 387 Ill. App. 3d at 413-14.

¶ 13 NIP responded to Landmark's motion by asserting that New Jersey law applied, and under relevant New Jersey precedent the policy provided coverage to the Brodsky suit. NIP further asserted that even if Illinois law applied, summary judgment was inappropriate and the Westport decision was inapplicable as it involved different policy language and different underlying facts. Finally, NIP contended it should, at the very least, be entitled to discovery in support of its response to Landmark's motion. NIP argued that discovery was necessary and relevant to determine the nature of its professional services and the facts surrounding its affirmative defenses. These assertions were supported by three affidavits, one of which was filed pursuant to Illinois Supreme Court Rule 191(b) (eff. July 1, 2002). In his response, Mr. Brodsky also argued that New Jersey law applied and summary judgment was improper under either Illinois or New Jersey law.

¶ 14 In ruling upon Landmark's motion, the circuit court first noted that it was again denying NIP's request for additional discovery. The court reasoned, because its analysis of Landmark's duty to defend turned solely on a comparison of the allegations of the underlying complaint to the relevant provisions of the insurance policy, any such further discovery was unnecessary. The court then addressed the choice of law issue, finding that, because there was generally no relevant conflict between the law of Illinois and New Jersey law, it would apply the law of this forum. Following the holding in Westport -- and noting that this specific question had not been addressed by the courts in New Jersey -- the circuit court determined that the unambiguous language of the Landmark policy did not provide coverage for the allegations contained in the Brodsky complaint.


¶ 16 Mr. Brodsky and NIP filed separate appeals in this case, and those appeals have now been consolidated. Because they have each explicitly adopted the arguments contained in their separate briefs, however, we will refer to their assertions on appeal collectively. For the following reasons, we find that the circuit court: (1) properly denied the forum non conveniens motion; (2) improperly refused to stay a portion of this suit; and (3) improperly granted summary judgment in favor of Landmark. As a result of these findings, the issue of NIP's right to discovery in support of its response to Landmark's summary judgment motion is rendered moot.

¶ 17 A. Choice of Law and Summary Judgment

¶ 18 We first address the circuit court's choice of law and summary judgment determinations, as the resolution of these issues will inform our discussion of the other matters raised on appeal.

¶ 19 Summary judgment is appropriate only where the pleadings, depositions, admissions and affidavits, viewed in the light most favorable to the non-movant, show that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2008). "The construction of an insurance policy and a determination of the rights and obligations thereunder are questions of law for the court which are appropriate subjects for disposition by way of summary judgment." Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 391 (1993). Our review of an order granting summary judgment is de novo. Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d 391, 399-400 (2010).

ΒΆ 20 In disputing Landmark's right to summary judgment under count I of its complaint, the parties have debated whether there is an outcome-determinative difference in how NIP's insurance policy would be interpreted under New Jersey law as opposed to the law of Illinois. While NIP and Mr. Brodsky assert that there are significant differences between the approaches taken by these two states in the interpretation of insurance policies, they ultimately contend that, under either approach, Landmark has a duty to defend NIP in the Brodsky litigation. Landmark asserts that there are no significant differences between the law of New Jersey and Illinois, a full choice of law analysis is therefore unnecessary, Illinois law should be applied here, and pursuant to the Westport decision it has ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.