A&R Logistics, Inc. v. American Zurich Insurance Co.

2023 IL App (1st) 221256-U

• Court: Appellate Court of Illinois
• Decided: April 26, 2023
• Docket: 1-22-1256
• Status: Unpublished

Opinion

2023 IL App (1st) 221256-U No. 1-22-1256 Order filed April 26, 2023 Third Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________ A&R LOGISTICS, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) Nos. 18 CH 4410, ) 18 CH 4471 AMERICAN ZURICH INSURANCE COMPANY and ) ZURICH AMERICAN INSURANCE COMPANY, ) Honorable ) Sophia H. Hall and Defendants-Appellees. ) Clare J. Quish, ) Judges, presiding.

JUSTICE BURKE delivered the judgment of the court. Presiding Justice McBride and Justice Reyes concurred in the judgment.

ORDER

¶1 Held: We affirm the circuit court’s dismissal of plaintiff’s second amended complaint with prejudice pursuant to section 2-615 of the Code of Civil Procedure because a choice-of-law analysis establishes that Illinois law applies to this case, and plaintiff only alleged claims under West Virginia law.

¶2 Plaintiff, A&R Logistics, Inc. (A&R), sued defendants, American Zurich Insurance

Company (American) and Zurich American Insurance Company (Zurich), for claims arising out No. 1-22-1256

of American’s denial of coverage for a workplace injury lawsuit that one of A&R’s employes filed

against A&R in West Virginia. 1 The circuit court dismissed A&R’s second amended complaint

pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2014)), finding

that, under a choice-of-law analysis, Illinois law applies to this case and A&R cannot prevail under

Illinois law. On appeal, A&R argues that (1) West Virginia law and Illinois law would produce

different outcomes in this case and West Virginia law applies, (2) the circuit court erroneously

decided the section 2-615 motion to dismiss on the merits of the case rather than on the face of the

complaint, (3) two counts of the complaint should not have been dismissed because they stated

claims under Illinois law, and (4) the circuit court should have granted A&R leave to amend the

complaint rather than dismissing it. For the following reasons, we affirm.

¶3 I. BACKGROUND

¶4 Christopher Toth was employed as a truck driver at an A&R facility in West Virginia. In

2014, he was injured while unloading his truck during a delivery in Ohio. 2 Toth filed a workers’

compensation claim in West Virginia, which A&R settled. He also filed a lawsuit against A&R in

West Virginia state court, which was removed to the United States District Court for the Southern

District of West Virginia. Toth’s lawsuit against A&R was based on the deliberate intention

exception to the West Virginia Workers’ Compensation Act, which allows an employee to sue his

employer, in addition to collecting workers’ compensation, if the employer acted with “deliberate

intention” in causing the employee’s injury (W. Va. Code Ann. § 23-4-2(d)(2) (West 2014)). A&R

1 A&R filed two separate lawsuits against American and Zurich, which were consolidated in the circuit court. According to A&R’s second amended complaint, American and Zurich are related insurance companies under common control. Defendants state that they are two different insurance carriers that are commonly owned and managed. 2 We refer to A&R by its name instead of “plaintiff” to avoid confusion between the plaintiff in this lawsuit and Toth, the plaintiff in his workplace injury lawsuit against A&R.

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settled Toth’s lawsuit and incurred at least $380,000 in defense costs and settlements between

Toth’s worker’s compensation claim and his lawsuit.

¶5 American insured A&R under a workers’ compensation and employer liability policy (the

WC policy). The WC policy states that American has a duty to defend A&R for “any claim,

proceeding or suit” against A&R for benefits payable under the policy. In turn, the policy covers

“bodily injury by accident” sustained by A&R’s employees, but not “[b]odily injury intentionally

caused or aggravated by [A&R].” In addition, a form entitled “West Virginia Employers Liability

Insurance Intentional Act Exclusion Endorsement” (the intentional act exclusion) excludes from

coverage “bodily injury intentionally caused or aggravated by [A&R] or which is the result of

[A&R’s] engaging in conduct equivalent to an intentional tort, however defined, including by

[A&R’s] deliberate intention as that term is defined by W. Va. Code § 23-4-2(d)(2).”

¶6 Zurich insured A&R under a commercial general liability policy (the CGL policy). The

CGL policy contains a section titled “Stop Gap Employers Liability Coverage,” which states that

Zurich has a duty to defend A&R in any lawsuit seeking damages for “bodily injury by accident”

sustained by A&R’s employees. The CGL policy excludes from coverage bodily injury

“intentionally caused or aggravated by A&R.” The policy also states that, “[f]or injury to

‘employees’ subject to West Virginia Workers’ Compensation Laws, this exclusion applies only

if the act causing or aggravating the injury is of deliberate intent as defined by SB744 paragraph

(2)(ii).”

¶7 A&R tendered Toth’s lawsuit to defendants and requested coverage in the form of defense

and indemnification. American denied coverage under the WC policy based on the intentional act

exclusion, but Zurich provided coverage under the CGL policy. Zurich conceded that the

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intentional injury exclusion in the CGL policy had become unenforceable due to the West Virginia

Supreme Court’s decision in First Mercury Insurance Co. v. Russell, 239 W. Va. 773 (2017).

According to A&R, defendants took this approach because the CGL policy has a higher deductible

than the WC policy, so coverage under the CGL policy is more favorable to defendants and less

favorable to A&R.

¶8 A&R subsequently filed this lawsuit against defendants in the circuit court of Cook County.

A&R’s second amended complaint, which is at issue in this appeal, alleged that West Virginia law

applies to this dispute and governed both the WC policy and the CGL policy. A&R alleged that

the WC policy’s intentional act exclusion had been rendered unenforceable by the West Virginia

Supreme Court in Russell. Count I of the complaint sought declaratory judgment that, under the

WC policy, American owed a duty to provide coverage to, defend, and indemnify A&R for Toth’s

lawsuit. Count II alleged breach of contract for American’s failure to provide coverage under the

WC policy. Count III alleged breach of the implied covenant of good faith and fair dealing. Count

IV alleged that American violated “West Virginia insurance regulations, standards and laws.”

¶9 Defendants filed a section 2-615 motion to dismiss the second amended complaint. They

argued that A&R failed to allege a claim for which relief could be granted because all of A&R’s

claims were premised on the application of West Virginia law, but A&R had not pled any facts to

support the application of West Virginia law instead of Illinois law. In response, A&R argued that

West Virginia law applied because “the incident giving rise to this coverage dispute stems from

an accident at A&R’s West Virginia terminal, the workers’ compensation claim at issue was

governed by West Virginia law and the exclusion (wrongly) relied upon by American [ ] is specific

only to West Virginia’s employer’s liability claims.”

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¶ 10 The circuit court performed a choice-of-law analysis and concluded that the WC policy’s

intentional act exclusion would not be unenforceable in West Virginia under Russell, and “[t]here

is no dispute that the Intentional Act Exclusion is valid under Illinois law.” Therefore, the circuit

court concluded, West Virginia law and Illinois law would produce the same result, Illinois law

applied, and the intentional act exclusion supported American’s denial of coverage. Because

American had no duty to provide coverage, the court dismissed count I, and dismissed the

remaining counts as moot. The dismissal was with prejudice.

¶ 11 A&R filed a motion to reconsider, arguing that its counts for declaratory relief and breach

of contract stated claims under Illinois law, so the circuit court either should not have dismissed

them or should have allowed A&R to replead them. Defendants responded that A&R forfeited its

argument that those counts stated claims under Illinois law because it did not make that argument

in response to the motion to dismiss, and because the second amended complaint explicitly alleged

that West Virginia law applied. Defendants also argued that A&R necessarily took the position

that the intentional act exclusion was unenforceable under West Virginia law, but enforceable

under Illinois law, because that was the only way the two states’ laws could produce different

outcomes such that West Virginia law could apply to this case. The circuit court denied A&R’s

motion to reconsider, finding that A&R forfeited its argument that Illinois law applied to the counts

for declaratory relief and breach of contract because it raised that argument for the first time in its

motion to reconsider.

¶ 12 A&R timely appealed.

¶ 13 II. ANALYSIS

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¶ 14 On appeal, A&R challenges the circuit court’s rulings on four grounds. First, A&R

contends that the circuit court’s choice-of-law analysis was incorrect because Illinois and West

Virginia laws would lead to different outcomes, and West Virginia law should apply. Second,

A&R argues that the circuit court erred by deciding defendants’ section 2-615 motion to dismiss

on the merits of A&R’s claims rather than the sufficiency of the second amended complaint on its

face. Third, A&R argues that its counts for declaratory relief and breach of contract should not

have been dismissed because they stated claims under Illinois law. Finally, A&R contends that the

circuit court should have allowed A&R to file a third amended complaint rather than dismissing

this case with prejudice.

¶ 15 A. Choice-of-Law

¶ 16 The central dispute of this appeal is whether Illinois law or West Virginia law applies to

A&R’s claims. Our resolution of this issue will govern the resolution of this appeal as a whole.

A&R argues that the application of Illinois law would produce a different outcome than the

application of West Virginia law, and that West Virginia law should control.

¶ 17 We review the circuit court’s choice-of-law determination de novo (Townsend v. Sears,

Roebuck and Co., 227 Ill. 2d 147, 153 (2007)), which means that we perform the same analysis

as the circuit court (Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011)). We apply

Illinois’ choice-of-law rules, and the first step in Illinois’ choice-of-law analysis is to determine

whether the application of different states’ laws would produce different outcomes. Townsend,

227 Ill. 2d at 155. A choice-of-law determination is only required when the party seeking that

determination establishes an actual conflict between two states’ laws. Bridgeview Health Care

Center, Ltd. v. State Farm Fire & Cas. Co., 2014 IL 116389, ¶ 25; see also Townsend, 227 Ill. 2d

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at 155 (“A choice-of-law determination is required only when a difference in law will make a

difference in the outcome.”). If the outcome would be the same under the laws of either state,

then Illinois law applies as the law of the forum. Chicago Board Options Exchange, Inc. v.

International Securities Exchange, 2012 IL App (1st) 102228, ¶ 44.

¶ 18 1. West Virginia Law

¶ 19 The West Virginia Workers’ Compensation Act provides immunity to employers for

employees’ lawsuits alleging work-related injuries. Smith v. Apex Pipeline Services, Inc., 230 W.

Va. 620, 627 (2013); W. Va. Code Ann. § 23-2-6 (West 2014). However, an employer does not

have immunity from suit when it acts with deliberate intention to cause the employee’s injury.

Smith, 230 W. Va. at 627; W Va. Code Ann. § 23-4-2(d)(2) (West 2014). In that case, the

employee may sue his employer for damages in addition to collecting workers’ compensation

benefits. Smith, 230 W. Va. at 627; W. Va. Code Ann. §§ 23-4-6 and 2(c) (West 2014). To

establish deliberate intention in West Virginia, an employee must prove that (1) an unsafe

working condition with a high degree of risk and a strong probability of serious injury or death

existed, (2) the employer had actual knowledge of the unsafe working condition, (3) the unsafe

working condition violated a state or federal safety statute or commonly accepted industry

standard, (4) the employer exposed the employee to the unsafe condition, and (5) the employee

suffered serious compensable injury or death. Smith, 230 W. Va. at 628; W. Va. Code Ann. § 23-

4-2(d)(2)(ii)(A-E) (West 2014).

¶ 20 Toth alleged a deliberate intention theory in his lawsuit against A&R, and American

denied coverage under the WC policy’s intentional act exclusion. In West Virginia, “[a]n

insurance company seeking to avoid liability through the operation of an exclusion has the

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burden of proving the facts necessary to the operation of that exclusion.” (Internal quotations and

citations omitted.) State ex rel. Nationwide Mut. Ins. Co. v. Wilson, 236 W. Va. 228, 236 (2015)

However, “[w]here the provisions of an insurance policy contract are clear and unambiguous

they are not subject to judicial construction or interpretation, but full effect will be given to the

plain meaning intended.” (Internal quotations and citations omitted.) Cherrington v. Erie

Insurance Property and Casualty Co., 231 W. Va. 470, 486 (2013).

¶ 21 The language of the WC policy and the intentional act exclusion is unambiguous. The

endorsement at issue is titled “Intentional Act Exclusion,” and it states that the WC policy does

not cover an injury to an employee “which is the result of [A&R’s] engaging in conduct

equivalent to an intentional tort, however defined, including by [A&R’s] deliberate intention as

that term is defined by W. Va. Code § 23-4-2(d)(2).” That language precisely describes Toth’s

lawsuit against A&R. Toth’s complaint, which is attached to A&R’s second amended complaint,

alleged one count for deliberately intentional injury under section 23-4-2(d)(2). The West

Virginia Supreme Court has held that an insurer can, under a workers’ compensation and

employers’ liability policy, properly exclude coverage for an employee’s lawsuit alleging

deliberate intention pursuant to section 23-4-2. W. Va. Employers’ Mutual Insuranc. Co. v.

Summit Point Raceway Associates, 228 W. Va. 360, 371-73 (2011). So, West Virginia law would

find that American’s denial of coverage under the WC policy was proper because the language

of the intentional act exclusion unambiguously excludes coverage for Toth’s deliberate intent

lawsuit under section 23-4-2.

¶ 22 A&R argues that American’s denial of coverage would be improper under the West

Virginia Supreme Court’s decision in Russell. In that case, Jeffrey Russell, an employee of

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Kimes Steel, was injured in a workplace accident and sued the company, alleging that Kimes

Steel acted with deliberate intention as defined in section 23-4-2. Russell, 239 W. Va. at 776.

Kimes Steel was insured under a commercial general liability policy issued by First Mercury,

which excluded from coverage employees’ claims of bodily injury. Id. However, the commercial

general liability policy also contained an endorsement titled “Stop Gap – Employers Liability

Coverage Endorsement – West Virginia,” which covered any damages that Kimes Steel was

obligated to pay due to employees’ claims of bodily injury by accident. Id. at 776-78. First

Mercury denied coverage for Russell’s lawsuit against Kimes Steel and the parties filed claims

against each other arising out of that denial of coverage. Id. at 776. A West Virginia circuit court

granted summary judgment for Kimes Steel, finding that the stop gap endorsement was

ambiguous as to whether it covered Russell’s deliberate intent action, and that Kimes Steel had a

reasonable expectation of coverage for Russell’s claims. Id. at 777.

¶ 23 The West Virginia Supreme Court agreed that the stop gap endorsement was ambiguous.

Id. at 780. The court explained that, under West Virginia law, “stop gap” provisions are intended

to provide “coverage for employers when employees are able to bring an action for injury despite

workers’ compensation immunity.” Id. at 778 (citing Erie Insurance Property and Casualty Co.

v. Stage Show Pizza, JTS, Inc., 210 W. Va. 63, 68 (2001)). So, the “Stop Gap” heading indicated

coverage for Russell’s action alleging deliberately intentional injury, yet the body of the

endorsement only provided coverage for bodily injury by accident and attempted to exclude

coverage for injury caused by Kimes Steel’s deliberate intention. Id. at 778-79. This

contradiction created an ambiguity that had to be construed in favor of coverage. Id. at 779. The

West Virginia Supreme Court affirmed summary judgment in favor of Kimes Steel. Id. at 780.

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¶ 24 A&R argues that Russell means that the WC policy’s intentional act exclusion is

unenforceable in this case. However, the differences between Russell and this case are readily

apparent. In Russell, the insurer denied coverage under a commercial general liability policy for

the insured company’s employee’s lawsuit alleging deliberate workplace injury. In this case,

Zurich accepted coverage under the CGL policy for Toth’s lawsuit alleging deliberate workplace

injury. American denied coverage under the WC policy, a type of policy that was not at issue in

Russell. Moreover, in Russell, the intentional injury exclusion was unenforceable because it was

ambiguous when read with the stop gap endorsement as a whole. In this case, A&R does not

argue that the WC policy or the intentional act exclusion are ambiguous. Unlike the stop gap

endorsement in Russell, nothing in the WC policy or the intentional act exclusion suggests that

American would provide coverage for a deliberately intentional injury or a lawsuit alleging one.

Russell does not stand for a general principle of West Virginia law that means that the intentional

act exclusion in this case is unenforceable.3 Accordingly, we find that West Virginia law would

hold that American properly denied coverage under the unambiguous language of the WC

policy’s intentional act exclusion.

¶ 25 2. Illinois Law

¶ 26 The Illinois Workers’ Compensation Act (820 ILCS 305/1 et seq. (West 2014)) makes

workers’ compensation benefits the exclusive remedy for injuries arising out of the course of

employment. Garland v. Morgan Stanley & Co., Inc., 2013 IL App (1st) 112121, ¶ 24. However,

an employee can sue his employer, in addition to seeking workers’ compensation, when the

3 Our research indicates that Russell has not been extended to the language of any insurance policy aside from the policy that was before the West Virginia courts in that case.

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employer deliberately injures the employee. Id. ¶¶ 25-29. An employee who brings an intentional

tort claim against his employer must allege that the defendant acted deliberately with the specific

intent to injure him. Id. ¶ 29.

¶ 27 In Illinois, a court must give the clear and unambiguous words of an insurance policy

their plain, ordinary, and popular meaning. Empire Indemnity Insurance Co. v. Chicago Province

of Society of Jesus, 2013 IL App (1st) 112346, ¶ 33. By contrast, if the policy’s language is

susceptible to multiple reasonable interpretations, then it is ambiguous and must be strictly

construed in favor of coverage. Id. However, a court must not strain to find ambiguity where

none exists. Id. “ ‘To determine whether the insurer has a duty to defend the insured, the court

must look to the allegations in the underlying complaint and compare these allegations to the

relevant provisions of the insurance policy.’ ” Id. ¶ 34 (quoting Outboard Marine Corp. v.

Liberty Mutual Insurance Co., 154 Ill. 2d 90, 107-08 (1992)). If the underlying complaint alleges

facts that fall within, or even potentially within, coverage, then the insurer must defend the

insured even if the allegations are groundless, false, or fraudulent. Empire Indemnity, 2013 IL

App (1st) 112346, ¶ 34. An insurer can only refuse to defend a lawsuit against the insured if it is

clear from the face of the underlying complaint that the allegations fail to state facts that bring

the case within, or potentially within, the policy’s coverage. Id. In determining whether the

allegations in the underlying complaint meet that threshold, both the underlying complaint and

the insurance policy must be liberally construed in favor of coverage. Id. ¶ 35. Phrases in the

underlying complaint such as “intentionally” or “willfully” indicate intentional conduct to which

an exclusionary clause for intentional conduct applies. Illinois State Bar Ass’n Mutual Insurance

Co. v. Leighton Legal Group, LLC, 2018 IL App (4th) 170548, ¶ 38.

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¶ 28 Toth’s underlying lawsuit alleged that A&R “deliberately formed the intention to

produce the specific result of the injuries suffered by” him. (Emphasis added.) The WC policy

states that it does not cover claims for “[b]odily injury intentionally caused or aggravated by

[A&R].” Moreover, the intentional act exclusion states that it does not cover claims alleging an

injury to an employee “which is the result of [A&R’s] engaging in conduct equivalent to an

intentional tort.” (Emphasis added.). Toth’s lawsuit plainly alleged intentional misconduct by

A&R that caused his injury, and both the WC policy and the intentional act exclusion

unambiguously exclude such a claim from coverage. Illinois law would produce the same result

as West Virginia law; namely, that American properly denied coverage under the WC policy.

Because the two states’ laws would produce the same result, Illinois law applies as the law of the

forum. See Chicago Board Options Exchange, 2012 IL App (1st) 102228, ¶ 44.

¶ 29 A&R argues that Illinois law and West Virginia law would produce different outcomes

because there are “differences in the two states’ workers’ compensation statutory schemes.” We

express no opinion on whether that is accurate. In any event, what matters is whether American’s

denial of coverage would be improper under West Virginia law, yet proper under Illinois law.

That is the only scenario that could produce a choice-of-law conflict that would result in West

Virginia law applying to this case. However, as explained above, American’s denial of coverage

would be proper under both states’ laws because the language of the WC policy and the

intentional act exclusion are unambiguous. Therefore, Illinois law applies. A&R’s second

amended complaint explicitly alleged that it sought relief under West Virginia law, stated no

claims under Illinois law, and alleged no facts that would render the intentional act exclusion

unenforceable in Illinois. Critically, A&R did not allege that the WC policy or the intentional act

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exclusion were unenforceable because they were ambiguous. A&R only alleged that the

intentional act exclusion was unenforceable due to the West Virginia Supreme Court’s decision

in Russell. Accordingly, A&R stated no claims for which relief could be granted under Illinois

law, and we affirm the circuit court’s dismissal of the second amended complaint.

¶ 30 B. Dismissal Pursuant to Section 2-615

¶ 31 A&R next argues that the circuit court erred “because it decided the case on the merits,

which is improper on a motion to dismiss under Section 2-615.” According to A&R, the circuit

court should have instead analyzed the sufficiency of A&R’s claims on the face of the second

amended complaint. The circuit court’s ruling was based on its choice-of-law analysis, which

concluded that Illinois law applies to this dispute. This argument essentially presents the question

of whether the circuit court properly resolved a section 2-615 motion to dismiss based on a

choice-of-law analysis.

¶ 32 A section 2-615 motion to dismiss challenges the legal sufficiency of the complaint. Jane

Doe-3 v. McLean County Unit District No. 5 Board of Directors, 2012 IL 112479, ¶ 15. The

question is whether the facts alleged, viewed in the light most favorable to the plaintiff, and

taking all well-pleaded facts and reasonable inferences as true, are sufficient to state a cause of

action for which relief may be granted. Id. ¶ 16. The circuit court should only grant a section 2-

615 motion to dismiss if no set of facts can be proved that would entitle the plaintiff to recovery.

Id.

¶ 33 The alternative to a section 2-615 motion to dismiss is a section 2-619 motion to dismiss.

A section 2-619 motion “ ‘admits the legal sufficiency of the plaintiff’s complaint but raises

defects, defenses, or other affirmative matters that appear on the complaint’s face or that are

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established by external submissions acting to defeat the complaint’s allegations.’ ” Guarantee

Trust Life Insurance Co. v. Kribbs, 2016 IL App (1st) 160672, ¶ 27 (quoting Burton v. Airborne

Express, Inc., 367 Ill. App. 3d 1026, 1029 (2006)). Our review is de novo under either section 2-

615 or 2-619. Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, ¶ 31.

¶ 34 Caselaw regarding whether choice-of-law issues should be resolved under section 2-615

or 2-619 is limited. Our supreme court has indicated “choice of law [is] an affirmative matter”

under section 2-619. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 487 (1994) (citing

Ingersoll v. Klein, 46 Ill. 2d 42 (1970)). More recently, the Fourth District concluded that choice-

of-law issues “are properly considered and addressed in the context of a section 2-619 motion to

dismiss, where a trial court may consider pleadings, depositions, and affidavits when making its

ruling *** rather than in the context of a section 2-615 motion, where only the pleadings may be

considered.” (Internal citation omitted.) Perkinson v. Courson, 2018 IL App (4th) 170364, ¶ 37.

This is because the choice-of-law analysis often raises factual issues that cannot be resolved on

the face of the complaint alone. Id. However, we have also affirmed a circuit court’s choice-of-

law analysis concluding that Illinois law applies in the context of a section 2-615 motion. Miller

v. Hayes, 233 Ill. App. 3d 847, 848 (1992).

¶ 35 Defendants’ motion to dismiss and the circuit court’s order granting it cited only section

2-615. That approach was proper. See id. The second amended complaint alleged sufficient facts

to address the choice-of-law issue. A&R’s alleged that Toth was a West Virginia resident

employed in West Virginia, that he was injured in Ohio, and that both his workers’ compensation

claim and his lawsuit against A&R were filed and settled in West Virginia. It also alleged that

A&R is an Illinois corporation with its principal place of business in Kentucky, that American is

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an Illinois corporation with its principal place of business in Illinois, and that Zurich is a New

York corporation with its principal place of business in Illinois. Defendants do not appear to

dispute any of these allegations. While choice-of-law issues sometimes raise factual questions

that must be addressed with materials outside the pleadings, that is not the case here.

¶ 36 A&R argues that the circuit court did not identify defects apparent on the face of the

second amended complaint and instead “jump[ed] straight to resolving the declaratory judgment

issue on its merits.” Even if the circuit court treated the enforceability of the intentional act

exclusion more like an affirmative matter that defeated A&R’s claims, we need not reverse on

that basis. Dismissal under section 2-615 is warranted as well. See Coghlan v. Beck, 2013 IL

App (1st) 120891, ¶ 24 (we review the judgment, not the reasoning, of the circuit court, and may

affirm on any grounds in the record, regardless of whether the circuit court relied on those

grounds or whether the circuit court’s reasoning was correct). A&R’s complaint alleged that

West Virginia law applies to this case. It contained a section titled “Choice of Law,” which

alleged that “West Virginia law applies to this coverage dispute.” The complaint also alleged that

Russell rendered the WC policy’s Intentional Act Exclusion unenforceable. However, the circuit

court correctly concluded that Illinois law applies to this case. A&R did not allege that the

intentional act exclusion was unenforceable for any reason in Illinois, so it failed to state any

grounds upon which relief could be granted in Illinois. That is precisely the section 2-615

analysis. See Doe-3, 2012 IL 112479, ¶ 16. Accordingly, we find that the circuit court’s

dismissal of the second amended complaint pursuant to section 2-615 was appropriate.

¶ 37 C. Counts I and II Under Illinois Law

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¶ 38 A&R next argues that count I, seeking declaratory judgment, and count II, alleging

breach of contract, “are cognizable causes of action under Illinois law” and should not have been

dismissed. 4 Defendants maintain that A&R forfeited this argument by raising it for the first time

in its motion to reconsider the dismissal of the second amended complaint. The circuit court

agreed and denied the motion to reconsider based in part on A&R’s forfeiture of this argument.

¶ 39 “The purpose of a motion to reconsider is to bring to a court’s attention: (1) newly

discovered evidence; (2) changes in the law; or (3) errors in the court’s previous application of

existing law.” Liceaga v. Baez, 2019 IL App (1st) 181170, ¶ 25. A new legal theory cannot serve

as the basis of a motion to reconsider. Id. So, a legal theory that was not advanced previously is

forfeited. Id. We agree that A&R forfeited its argument that count II stated a claim under Illinois

law because A&R made that argument for the first time in its motion to reconsider. See Evanston

Insurance Co. v. Riseborough, 2014 IL 114271, ¶ 36 (“Arguments raised for the first time in

motion for reconsideration in the circuit court are forfeited on appeal.”). But that is not true of

count I. A&R’s response to defendants’ motion to dismiss the second amended complaint

included a footnote stating that “[i]t is self-evident that the pleading requests relief in an Illinois

court pursuant to the Illinois Declaratory Judgment Act.” That is sufficient to avoid forfeiture.

See Tabora v. Gottlieb Memorial Hospital, 279 Ill. App. 3d 108, 114 (1996) (a footnote can be

enough to avoid forfeiture).

¶ 40 However, that argument fails on the merits. Count I of the second amended complaint

made no mention of Illinois law or the Illinois Declaratory Judgment Act (735 ILCS 5/2-701

4 A&R’s reply brief acknowledges that count III, alleging a breach of the implied covenant of good faith, and count IV, alleging violations of West Virginia insurance law, “require the application of West Virginia law to avoid dismissal since they are not viable causes of action under Illinois law.”

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(West 2014)). The complaint repeatedly alleged that West Virginia law governs this coverage

dispute, going so far as to have a separate section dedicated to that proposition. As noted above,

A&R alleged the intentional act exclusion is unenforceable only because of Russell, not because

of ambiguity or any other issue in Illinois law.5 Illinois is a fact pleading jurisdiction, so we

cannot infer through liberal construction that A&R meant to plead count I under Illinois law

when the complaint explicitly alleged that West Virginia law applies. See Lake County Grading

Co. of Libertyville, Inc. v. Advance Mechanical Contractors, Inc., 275 Ill. App. 3d 452, 456-57

(1995). Moreover, even if A&R had not forfeited its argument with respect to count II, that

argument would fail on the merits for the same reasons. Count II alleged that American breached

the insurance agreement by enforcing the intentional act exclusion when that exclusion had, in

A&R’s view, been rendered unenforceable due to Russell. A West Virginia Supreme Court

decision cannot serve as the basis for a breach of contract claim under Illinois law. Accordingly,

we find that count I of the second amended complaint did not plead a claim for declaratory relief

under Illinois law.

¶ 41 D. Leave to Amend

¶ 42 Finally, A&R contends that the circuit court’s dismissal of the second amended

complaint was a harsh result, and that it should have allowed A&R to amend its complaint. “The

decision whether to grant leave to amend a complaint rests within the sound discretion of the

circuit court, and its decision will not be reversed absent an abuse of that discretion.” Atlas v.

5 A&R’s reply brief states that A&R “is prepared to argue that the [Intentional Act] Exclusion would also be unenforceable under Illinois law for several reasons, including that the plain language of the Exclusion means it is only intended to apply to claims brought under West Virginia Workers’ Compensation Laws.” The second amended complaint did not allege that. In any event, the WC policy itself excludes coverage for intentional injury separately from the intentional act exclusion and without reference to any particular state.

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Mayer Hoffman McCann, P.C., 2019 IL App (1st) 180939, ¶ 39. To determine whether the

circuit court abused its discretion in not granting leave to amend a pleading, we consider (1)

whether the proposed amendment would cure any defects in the pleading, (2) whether the party

opposing the amendment would be prejudiced, (3) the timeliness of the proposed amendment,

and (4) whether the party seeking leave to amend had previous opportunities to amend.

Abramson v. Marderosian, 2018 IL App (1st) 180081, ¶ 30 (citing Loyola Academy v. S & S

Roof Maintenance, Inc., 146 Ill. 2d 263, 273 (1992)).

¶ 43 These factors lead us to conclude that the circuit court did not abuse its discretion in not

allowing A&R to file a third amended complaint. Presumably, A&R would have amended counts

I and II to plead them under Illinois law instead of West Virginia law. Even if this amendment

would have cured facial defects of the complaint, it would have been untimely and prejudicial to

defendants. From the outset of this case, defendants recognized that A&R was asking an Illinois

court to enforce only West Virginia law and moved to dismiss A&R’s first three complaints.

A&R was on notice that its choice-of-law argument might not be successful, and it could have

pled alternative legal theories even if they were inconsistent. See Bureau Service Co. v. King,

308 Ill. App. 3d 835, 841 (1999); 735 ILCS 5/2-613(b) (West 2014) (allowing pleading in the

alternative “regardless of consistency”). However, A&R never pled any grounds for relief under

Illinois law. It was reasonable for the circuit court to conclude that A&R did not intend to seek

relief under Illinois law and to dismiss the complaint rather than allowing A&R to amend yet

again. Accordingly, we affirm the dismissal of A&R’s second amended complaint with

prejudice.

¶ 44 III. CONCLUSION

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¶ 45 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 46 Affirmed.

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