Searching over 5,500,000 cases.


searching
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.

G.M. Sign, Inc. v. Pennswood Partners, Inc.

Court of Appeals of Illinois, Second District

May 13, 2015

G.M. SIGN, INC., Plaintiff and Defendant and Counterplaintiff-Appellee and Cross-Appellant,
v.
PENNSWOOD PARTNERS, INC., Defendant-Appellee and Cross-Appellant Maryland Casualty Company and Assurance Company of America, Plaintiffs and Counterdefendants-Appellants and Cross-Appellees

Page 170

Appeal from the Circuit Court of Lake County. Nos. 07-CH-757, 08-MR-153. Honorable Margaret J. Mullen, Judge, Presiding.

Michael M. Marick, Karen M. Dixon, and Timothy H. Wright, all of Meckler Bulger Tilson Marick & Pearson LLP, of Chicago, for appellants.

Brian J. Wanca and David M. Oppenheim, both of Anderson & Wanca, of Rolling Meadows, and Phillip A. Bock and Robert M. Hatch, both of Bock & Hatch, LLC, of Chicago, for appellees.

Michael C. Borders and Rosa M. Tumialan, both of Dykema Gossett PLLC, of Chicago, for amicus curiae.

Burke and Spence, Justices concurred in the judgment and opinion.

OPINION

Page 171

McLAREN, JUSTICE.

[¶1] G.M. Sign, a recipient of unsolicited faxed advertisements, with its principal place of business in Round Lake, Illinois, filed a class action complaint against Pennswood Partners (Pennswood), a Pennsylvania corporation with its principal and

Page 172

only place of business in Pennsylvania. Pennswood's insurers, Maryland Casualty Company (Maryland Casualty) and Assurance Company of America (Assurance) (collectively, Zurich) denied Pennswood's tender of its defense. Maryland Casualty, a Maryland corporation with its principal place of business in Illinois, and Assurance, a New York corporation with its principal place of business also in Illinois, are underwriting insurance companies used by the Zurich Insurance Group's small business unit to issue insurance policies. Subsequently, G.M. Sign and Pennswood settled their lawsuit for $8 million. Zurich filed a declaratory judgment action against Pennswood and G.M. Sign, seeking a declaration that their insurance policies did not provide coverage to Pennswood for the underlying lawsuit. The parties filed cross-motions for summary judgment. Applying Illinois law, the trial court granted summary judgment in favor of Pennswood and G.M. Sign and against Zurich, determining that Zurich had a duty to defend and indemnify Pennswood and that the settlement was reasonable. The trial court entered judgment in favor of G.M. Sign in the amount of $8 million and denied Pennswood and G.M. Sign's request for accrued postsettlement interest.

[¶2] The parties appealed. On March 24, 2014, we issued an opinion reversing in part and affirming in part ( G.M. Sign, Inc. v. Pennswood Partners, Inc., 2014 IL App. (2d) 121276, 380 Ill.Dec. 799, 9 N.E.3d 49) (original opinion). G.M. Sign and Pennswood filed a motion for a supervisory order in the Illinois Supreme Court, which the supreme court granted. G.M. Sign, Inc. v. Pennswood Partners, Inc., No. 117912 (Ill. Aug. 22, 2014) (nonprecedential supervisory order directing vacatur of judgment and reconsideration in light of Bridgeview Health Care Center, Ltd. v. State Farm Fire & Casualty Co., 2014 IL 116389, 381 Ill.Dec. 493, 10 N.E.3d 902, and dismissing petition for leave to appeal as moot).

[¶3] On appeal Zurich argues: (1) Zurich had no duty to defend or indemnify Pennswood in the underlying action under Pennsylvania law; (2) Illinois courts are vested with the discretion to consider federal courts' predictions in their conflict-of-law analysis; and (3) in an insurance coverage case, a single state's law should be applied to the interpretation of an insurance policy.[1] Pennswood and G.M. Sign argue that the trial court erred by denying their request for accrued postsettlement interest. We vacate our original opinion and determine that our reconsideration in light of Bridgeview does not change the result. We reverse in part and affirm in part.

[¶4] I. BACKGROUND

[¶5] On March 20, 2007, G.M. Sign filed a class action complaint[2] against Pennswood, an executive placement services provider, alleging the following. Pennswood " transmitted by telephone facsimile machine unsolicited advertisements to [G.M. Sign's] facsimile machine." Pennswood " sent thousands of similar unsolicited facsimile advertisements to at least 39 other recipients." Pennswood " knew or should have known that" it did not have the recipients' permission or invitation to send them advertising. The complaint alleged that on two occasions in 2006 Pennswood faxed two unsolicited advertisements to G.M. Sign. The three-count complaint alleged

Page 173

the following: (1) Pennswood violated the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 27 (2006)), " by transmitting [the advertisements] to [G.M. Sign] and the other members of the class" and that Pennswood's " actions caused damages to [G.M. Sign] and the other class members, because their receipt of [Pennswood's] unsolicited fax advertisements caused them to lose paper and toner consumed as a result" and " cost [them] employee time" ; (2) Pennswood was liable for common-law conversion of the plaintiffs' " fax machine toner, paper, memory, and employee time" ; and (3) Pennswood violated the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2006)). The complaint alleged that a class action was proper in that " the class consists of forty or more persons in Illinois and throughout the United States and is so numerous that joinder of all members is impracticable." The complaint alleged that members of the class received faxed unsolicited advertisements from Pennswood within three, four and five years from the filing of the complaint. The complaint sought damages, an injunction, attorney fees, and the certification of the class.

[¶6] On May 22, 2007, Pennswood tendered its defense to Zurich. In a letter dated July 23, 2007, Zurich denied Pennswood's tender of defense, disclaiming any obligation to defend or indemnify in the underlying class action.

[¶7] On July 31, 2007, the parties to the underlying class action filed a motion in the trial court for approval of terms of a settlement agreement signed by the parties on July 27 and July 30, 2007. The settlement agreement provided that Pennswood agreed to allow entry of a judgment against it in the amount of $8 million that would be enforceable only " against the proceeds of" the Zurich policies. In addition, Pennswood agreed to assign to the class its rights under the Zurich policies.

[¶8] On October 30, 2007, following a fairness hearing, the trial court in the underlying class action granted Pennswood and G.M. Sign's motion for approval of the settlement agreement and entered judgment in favor of the class and against Pennswood in the amount of $8 million, " to be satisfied only from the proceeds of [Pennswood's four Zurich] insurance policies." The trial court also ordered G.M. Sign's attorney to receive 33.33% of any recovery from Zurich, in accordance with the agreement. The trial court found the provisions of the agreement to be fair and reasonable. The trial court found that Pennswood faxed in excess of 80,000 unsolicited advertisements to the class between March 20, 2003, and December 1, 2003; faxed in excess of 160,000 unsolicited advertisements to the class between December 1, 2003, and December 1, 2004; faxed in excess of 160,000 unsolicited advertisements to the class between December 1, 2004, and December 1, 2005; and faxed in excess of 160,000 unsolicited advertisements to the class between December 1, 2005, and December 1, 2006. The trial court ordered that postsettlement interest would accrue from the date of the entry of the order. The trial court stated that its order was a " final and appealable order."

[¶9] Zurich issued four commercial general liability policies to Pennswood (the Zurich policies) that were in effect during the relevant time period of the allegations contained in G.M. Sign's class action complaint. The policies were negotiated, delivered and received in Pennsylvania. The premiums for the policies were paid by Pennswood from Pennsylvania.

[¶10] Under " Coverage A," the Zurich policies provide coverage for " bodily injury"

Page 174

and " property damage" caused by an " occurrence." The policies define " occurrence" as an " accident, including continuous or repeated exposure to substantially the same general harmful conditions." The policies define " property damage" as:

" a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss shall be deemed to occur at the time of the 'occurrence' that caused it[.]"

[¶11] The policies contain the following exclusion:

" Expected Or. Intended Injury:
'Bodily Injury' or 'property damage' expected or intended from the standpoint of the insured."

[¶12] Under " Coverage B," the policies provide coverage for " personal and advertising injury."


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.