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G.M. Sign, Inc. v. State Farm Fire & Cas. Co.

Appellate Court of Illinois, Second District

May 2, 2014, Opinion Filed

No. 2-13-0593


 [*P1]  [**72]  [****72]     This is a declaratory judgment action involving a dispute over insurance coverage for a blast-fax case. The question is whether defendant State Farm Fire and Casualty Company's policy exclusion (hereinafter Endorsement FE-6655) applied to the amended complaint in the underlying litigation. If Endorsement FE-6655 applied, then State Farm's duty to defend was never triggered. The circuit  [**73]  [****73]  court of Lake County ruled that State Farm had a duty to defend and to indemnify. After modifying our opinion upon denial of plaintiff G.M. Sign, Inc.'s petition for rehearing, we reverse and remand with directions to enter judgment in State Farm's favor.


 [*P3]  The facts pertinent to this appeal are taken from the present record and from this court's opinion in G.M. Sign, Inc. v. Schane, 2013 IL App (2d) 120434, 985 N.E.2d 685, 368 Ill. Dec. 878. The appeal in Schane arose out of the underlying blast-fax litigation, in which G.M. [***2]  Sign pursued a class action against Michael Schane and his company, Academy Engraving Company, for sending unsolicited fax advertisements. Because Academy was dismissed from the underlying suit, we refer only to Schane when discussing the underlying litigation.

 [*P4]  A. The Underlying Litigation (No. 10-CH-4480)

 [*P5]  On August 12, 2010, G.M. Sign, individually and as the representative of a class of similarly situated persons, filed suit against Schane. The complaint began: "This case challenges [Schane's] practice of faxing unsolicited advertisements." The complaint's preliminary allegations further alleged that G.M. Sign was seeking "an award of statutory damages for each violation of the [Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227 et seq. (2000))]." ] The TCPA makes it unlawful to fax an unsolicited advertisement unless the sender has an established business relationship with the recipient, the recipient consents to such a communication, and the advertisement contains an opt-out notice. 47 U.S.C. § 227(b)(1)(C) (2000).

 [*P6]  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 (Act) [***3]  (815 ILCS 505/1 et seq. (West 2010)). Each count incorporated the same factual allegations: on or about September 6, 2007, Schane faxed to G.M. Sign an advertisement, which was attached to the complaint as "Exhibit A"; G.M. Sign had not given Schane permission to fax advertisements to it; and Schane faxed "the same or similar advertisements" to G.M. Sign and more than 39 other recipients without first receiving their express permission. All three counts incorporated allegations that the unsolicited fax advertisements violated the TCPA.

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2014 IL App (2d) 130593 *; 18 N.E.3d 70 **; 2014 Ill. App. LEXIS 635 ***; 385 Ill. Dec. 70 ****

G.M. SIGN, INC., Individually and as the Representative of a Certified Class, Plaintiff and Counterdefendant-Appellee and Cross-Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant and Counterplaintiff-Appellant and Cross-Appellee.

Subsequent History:  [***1] Modified Upon Denial of Rehearing September 2, 2014.

Appeal denied by G.M. Sign, Inc. v. State Farm Fire & Cas. Co., 2015 Ill. LEXIS 49 (Ill., Jan. 28, 2015)

Prior History: Appeal from the Circuit Court of Lake County. No. 11-MR-315. Honorable Diane E. Winter and David M. Hall, Judges, Presiding.

G.M. Sign, Inc. v. State Farm Fire & Cas. Co., 2014 IL App (2d) 130593, 2014 Ill. App. LEXIS 294 (2014)

Disposition: Reversed and remanded with directions.


faxes, amended complaint, advertisements, coverage, settlement, duty to defend, counts, settlement agreement, Endorsement, insurer, alternative count, trial court, unsolicited, facsimile, underlying litigation, factual allegations, allegations, diligence, pleadings, indemnify, courts, established business, class member, conversion, trigger, declaratory judgment action, insurance coverage, original complaint, sending, insurance policy

Business & Corporate Compliance, Communications Law, Federal Acts, Telephone Consumer Protection Act, Civil Procedure, Judgments, Pretrial Judgments, Judgment on Pleadings, Appeals, Standards of Review, De Novo Review, Declaratory Judgments, State Declaratory Judgments, Grounds for Relief, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Bad Faith & Extracontractual Liability, Refusals to Defend, Claim, Contract & Practice Issues, Policy Interpretation, Ordinary & Usual Meanings, Ambiguous Terms, Unambiguous Terms, Plain Language, Pleadings, Complaints, Requirements for Complaint, Pleading & Practice, Rule Application & Interpretation, Governments, Courts, Judicial Precedent