ILLINOIS CASUALTY COMPANY, Plaintiff and Counterdefendant-Appellee,
WEST DUNDEE CHINA PALACE RESTAURANT, INC., Defendant, (Wellington Homes, Inc., Individually and on Behalf of All Others Similarly Situated, Defendant and Counterplaintiff-Appellant)
from the Circuit Court of Lake County. No. 09-MR-844.
Honorable Diane E. Winter, Judge, Presiding.
McLAREN delivered the judgment of the court, with opinion.
Justices Jorgensen and Birkett concurred in the judgment and
[¶1] This is a declaratory judgment action
involving a dispute over insurance coverage for a fax-blast
case. The issue is whether plaintiff Illinois Casualty
Company's (ICC) policy exclusion (hereinafter Laws
exclusion) applies to the allegations in the complaint in the
underlying litigation. If the Laws exclusion applies, then
ICC's duty to defend defendant, West Dundee China Palace
Restaurant, Inc. (West Dundee), was never triggered. On
cross-motions for summary judgment, the trial court initially
ruled that ICC had a duty to defend. On a motion to
reconsider, the trial court ruled that ICC had no duty to
defend or indemnify. We affirm.
A. The Underlying Litigation (No.
[¶4] The following pertinent facts are taken
from the record on appeal. On August 4, 2009, Wellington
Homes, Inc., individually and as the representative of a
class of all others similarly situated (Wellington), filed a
second amended complaint against West Dundee, Zhaowei Li, and
Liwen She. On November 18, 2010, Wellington filed a third
amended complaint against West Dundee, Ahmad Azmi, and
Tehmini Azmi. The complaint's preliminary "
Statement" began: " This case challenges [West
Dundee's] practice of faxing unsolicited
advertisements." The preliminary " Statement"
further alleged that " The federal [Telephone Consumer
Protection Act of 1991 (TCPA) (47 U.S.C. § 227 et
seq. (2000))], prohibits a person or entity from faxing
or having an agent fax advertisements without the
recipient's prior express invitation or permission. The
TCPA provides a private right of action and provides
statutory damages of $500 per violation."
[¶5] The complaint contained three counts:
count I alleged a violation of the TCPA; count II alleged
conversion; and count III alleged violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act (815 ILCS
505/1 et seq. (West 2010)). Each count incorporated
the same factual allegations: on or about May 16, 2006, West
Dundee faxed to Wellington an advertisement, which was
attached to the complaint as " Exhibit A" ;
Wellington had not invited or given West Dundee permission to
fax advertisements to it; and West Dundee faxed " the
same or similar unsolicited facsimiles" to " more
than 39 other recipients without first receiving the
recipients' express permission or invitation. [West
Dundee's] facsimiles did not display a proper opt out
notice as required by 64 C.F.R. 1200."
[¶6] Count I of the complaint proposed the
" All persons who (1) on or after four years prior to
the filing of this action, (2) were sent telephone facsimile
messages of material advertising the commercial availability
of any property, goods, or services by or on behalf of [West
Dundee], (3) with respect to whom [West Dundee] cannot
provide evidence of prior express permission or invitation
for the sending of such faxes, (4) with whom [West Dundee]
does not have an established business relationship, and (5)
which did not display a proper opt out notice."
class proposed in count II was: " All persons who on or
after a date of five years prior to the filing of this
action, were sent telephone facsimile messages by or on
behalf of [West Dundee]." The class proposed in count
III was: " All persons in Illinois who on or after a
date of three years prior to the filing of this action, were
sent telephone facsimile messages by or on behalf of [West
B. The Declaratory Judgment Action (No.
[¶8] West Dundee and the individual
defendants failed to answer ICC's complaint and the trial
court entered default judgments in ICC's favor and
against them, stating, " this Order is not binding on
[Wellington] with respect to any argument they may have
regarding whether there is insurance coverage." ICC
filed a complaint and an amended complaint for declaratory
judgment against West Dundee and Wellington.
[¶9] On February 3, 2010, Wellington filed a
counterclaim for declaratory judgment against ICC, alleging
that ICC owed a duty to defend and indemnify West Dundee in
the underlying lawsuit. On March 8, 2011, ICC filed the
present second amended complaint for declaratory judgment,
alleging that it had no duty to defend or indemnify because