Policy’s Exclusion Bars Coverage for TCPA Claim and for Claims for Conversion and Deceptive Practices, Illinois Appeals Court Affirms

An appellate court in Illinois, affirming a trial court’s decision, has ruled that a policy exclusion precluded coverage for claims against an insured for violation of the federal Telephone Consumer Protection Act of 1991 (TCPA), conversion, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (the “Illinois Act”).

The Case

Wellington Homes, Inc., sued West Dundee China Palace Restaurant, Inc., alleging that West Dundee had faxed it unsolicited advertisements. Wellington alleged a violation of the TCPA, conversion, and violations of the Illinois Act.

An Illinois court ruled that the defendant’s insurer, Illinois Casualty Company (ICC), had no duty to defend or indemnify.

Wellington appealed, arguing that even if the policy excluded coverage of its TCPA claim, it did not bar coverage of its remaining claims.

The Appellate Court’s Decision

The appellate court affirmed.

In its decision, the appellate court explained that the policy excluded “Any liability or legal obligation of any insured with respect to … ‘property damage’ arising out of … The Telephone Consumer Protection Act (TCPA); or … any other similar statutes, ordinances, directives, orders or regulations.” The appellate court then found that Wellington’s conversion claim and its claim under the Illinois Act alleged conduct that was “nothing more than a rephrasing of the conduct alleged” in Wellington’s claim that West Dundee had violated the TCPA by sending advertising faxes without first obtaining prior express permission or invitation. According to the appellate court, all of these claims alleged property damage “arising out of the TCPA, similar statutes, or orders.”

Therefore, the appellate court concluded that ICC had no duty to defend West Dundee.

The case is Illinois Cas. Co. v. West Dundee China Palace Restaurant, Inc., No. 2-15-0016 (Ill. Ct. App. Oct. 29, 2015).