Bridgeview Health Care Center, LTD. v. State Farm Fire and Cas. Co.
2013 IL App (1st) 121920 (Ill. App., 2013)Words & Phrases
Choice Of LawTrial Judge
Honorable Rita M. NovakAppellate Judge
Justice NevilleHolding
Choice of law analysis necessary in TCPA case because there is a potential for conflict of law between Indiana and Illinois.Fact Summary
Bridgeview filed the underlying lawsuit against Clark in the United States District Court for the Northern District of Illinois, alleging that in 2006, Clark faxed an unsolicited advertisement to Bridgeview's business offices in Chicago. In the first count of the complaint, Bridgeview claimed that Clark violated the Telephone Consumer Protection Act (TCPA) (47 U.S.C. § 227 (2000)). The second count charged Clark with conversion of Bridgeview's toner, paper and employee time, and the third count charged Clark with violating the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2006)).
Clark tendered defense of the lawsuit to State Farm. State Farm accepted the defense subject to a reservation of the right to deny coverage, and it paid Clark's independent counsel's fees to fulfill its possible responsibility to provide a defense.
Bridgeview filed a lawsuit against State Farm and Clark, seeking a judgment declaring that State Farm had a duty to defend and indemnify Clark in the underlying lawsuit, because the unwanted faxes caused both advertising injury and property damage within the meaning of State Farm's policy. State Farm filed a counterclaim against Bridgeview and Clark, seeking a judgment declaring that it had no duty to defend or indemnify Clark in the underlying lawsuit.
Because this was a case in which multiple jurisdictions have an interest, the court had to determine whether the laws of the interested jurisdictions conflict. See Allianz Insurance Co. v. Guidant Corp., 373 Ill. App. 3d 652, 658 (2007). A court needs to determine which jurisdiction's law applies only when "a difference in law will make a difference in the outcome." Townsend v. Sears, Roebuck & Co., 227 Ill. 2d 147, 155 (2007).
The Illinois Supreme Court's decision in Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352 (2006), establishes that if Illinois law applies, State Farm has a duty to defend Clark. In Valley Forge, our supreme court held that a commercial liability policy much like the policy at issue here required the insurer to defend its insured against a charge that the insured violated the TCPA by sending unsolicited faxes. The Valley Forge court held that the faxes allegedly breached the recipient's privacy interests, and thus they caused "advertising injury" within the meaning of the policy's coverage. Valley Forge, 223 Ill. 2d at 368.
No decision of any Indiana state court establishes what result would follow if Indiana law applies. When other courts have found the law of another interested jurisdiction uncertain, those courts have undertaken a choice-of-law analysis to decide which jurisdiction's law applies.
Because Indiana state courts have not yet addressed this issue, the potential conflict with Illinois law requires the trial court to determine whether Illinois law or Indiana law governs this coverage dispute.