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Valley Forge Ins. Co. v. Swiderski Elecs., Inc.

Supreme Court of Illinois

November 30, 2006, Opinion Filed

Docket No. 101261.

Opinion

 [*354]   [**310]   [****656]  Ernie Rizzo, doing business as Illinois Special  [*355]  Investigations, filed suit individually and on behalf of a class of those similarly situated against Swiderski Electronics, Inc., based on Swiderski's alleged sending of unsolicited facsimile advertisements. Swiderski tendered the defense of the suit to Valley Forge Insurance Company and Continental Casualty Corporation pursuant to insurance policies Swiderski had purchased from them. Subsequently, the insurers sought a declaratory judgment that they had no duty to defend Swiderski against Rizzo's lawsuit (735 ILCS 5/2-701 (West 2002)). The parties filed cross-motions for summary judgment regarding the insurers' duty to defend (735 ILCS 5/2-1005 (West 2002)), and the circuit court of McHenry County granted summary judgment in favor of Swiderski. The appellate court [***2]  affirmed. 359 Ill. App. 3d 872, 834 N.E.2d 562, 296 Ill. Dec. 5. The issue before us is whether the insurers have a duty to defend Swiderski against Rizzo's lawsuit under the insurance policies. We hold that they do and affirm the judgment of the appellate court.

BACKGROUND

Ernie Rizzo operates a private investigation business known as Illinois Special Investigations. On June 19, 2003, Rizzo filed a three-count complaint in the McHenry County circuit court against Swiderski Electronics, Inc. According to the complaint, Swiderski sent Rizzo and numerous other individuals a fax advertisement with information on the sale, rental, and service of various types of electronic equipment. The complaint alleges that, by faxing copies of the advertisement without first obtaining the recipients' permission to do so, Swiderski (1) violated section 227 of the Telephone Consumer Protection Act (TCPA) (47 U.S.C. § 227 (2000)), (2) unlawfully converted the fax machine toner and paper of those who received the faxes, and (3) violated section 2 of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/2 (West  [*356]  2002)). 1 The [***3]  complaint seeks damages, attorney fees, and injunctive relief on behalf of all individuals who received an unsolicited fax advertisement from Swiderski within the four-year period preceding the filing of the complaint. As yet, no class has been certified.

Swiderski tendered the defense of Rizzo's lawsuit to its primary insurer, Valley Forge Insurance Company, and its excess insurer, Continental Casualty Corporation. Under the Valley Forge policy, Valley Forge has a duty to defend Swiderski against any suit seeking damages caused by "personal and advertising injury." "Personal and advertising injury" includes injury that arises out of one or more of the following offenses:

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223 Ill. 2d 352 *; 860 N.E.2d 307 **; 2006 Ill. LEXIS 1655 ***; 307 Ill. Dec. 653 ****

VALLEY FORGE INSURANCE COMPANY et al., Appellants, v. SWIDERSKI ELECTRONICS, INC., et al., Appellees.

Subsequent History: Counsel Amended January 30, 2007.

Prior History:  [***1]  Appeal from the Appellate Court for the Second District.

Valley Forge Ins. Co. v. Swiderski Elecs., Inc., 359 Ill. App. 3d 872, 834 N.E.2d 562, 2005 Ill. App. LEXIS 870, 296 Ill. Dec. 5 (Ill. App. Ct. 2d Dist., 2005)

Disposition: Affirmed.

CORE TERMS

insurers, advertising injury, advertisement, right to privacy, fax, violates, duty to defend, privacy, seclusion, coverage, policies, unsolicited, property damage, sending, insurance policy, recipients, no duty, Dictionary, damages, lawsuit, fax-ad, provisions, allegations, includes, words, unpublished opinion, appellate court, circuit court, secrecy, falls

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Legal Entitlement, Materiality of Facts, Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Claim, Contract & Practice Issues, General Overview, Ordinary & Usual Meanings, Plain Language, Business Insurance, Commercial General Liability Insurance, Duty to Defend, Excess Insurance, Obligations, Business & Corporate Compliance, Communications Law, Federal Acts, Telephone Consumer Protection Act