National Fire Insurance Co. of Hartford v. Visual Pak Co.

2023 IL App (1st) 221160, 243 N.E.3d 888

• Court: Appellate Court of Illinois
• Decided: December 19, 2023
• Docket: 1-22-1160
• Status: Published

Opinion

No. 1-22-1160

2023 IL App (1st) 221160

SECOND DIVISION December 19, 2023

No. 1-22-1160 ____________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ____________________________________________________________________________

THE NATIONAL FIRE INSURANCE ) COMPANY OF HARTFORD and ) Appeal from the Circuit Court of CONTINENTAL INSURANCE COMPANY, ) Cook County, Illinois, County ) Department, Chancery Division Plaintiffs-Appellees, ) ) v. ) No. 2020 CH 06897 ) VISUAL PAK COMPANY, INC. and LUIS ) SANCHEZ, Individually and on Behalf of All ) Hon. Thaddeus L. Wilson, Others Similarly Situated, ) Judge Presiding. ) Defendants-Appellants. ) ______________________________________________________________________________

JUSTICE ELLIS delivered the judgment of the court, with opinion. Justices McBride and Cobbs concurred in the judgment and opinion.

OPINION

¶1 In this insurance coverage dispute, plaintiffs National Fire Insurance Company of

Hartford and Continental Insurance Company filed suit for a declaration that they did not owe a

duty to defend or indemnify defendant Visual Pak Company in an underlying lawsuit. Plaintiffs

moved for judgment on the pleadings, claiming that various exclusions in their policies barred

coverage in that underlying suit. The trial court initially disagreed, finding that the insurers were

estopped from asserting defenses within the policy. On reconsideration, the trial court reversed No. 1-22-1160

itself, ruling that a particular exclusion in the policy barred coverage, and because plaintiff had

no duty to defend, the question of estoppel was moot.

¶2 We affirm the circuit court’s judgment. The trial court correctly reconsidered its initial,

erroneous ruling and reversed course. Plaintiffs owed Visual Pak no duty to defend under the

terms of their policies. In reaching this conclusion, we are mindful of a recent decision from the

United States Court of Appeals for the Seventh Circuit, which reached the opposite conclusion

under Illinois law. Though we do not do so lightly, we believe that this federal decision was

wrongly decided and decline to follow it.

¶3 And once the determination is made that the insurer owed no duty to defend, estoppel is

inapplicable. Estoppel will prevent an insurer in certain circumstances from asserting various

defenses to coverage, but it cannot be used to convert a policy that does not provide coverage

into one that does.

¶4 BACKGROUND

¶5 Like any case involving an alleged duty to defend, this case begins with an underlying

lawsuit for which a defendant seeks defense from its insurer. So the story, so to speak, begins

with that underlying suit.

¶6 I. The Biometric Information Privacy Act Lawsuit

¶7 A staffing and temporary employment agency named Elite Staffing provided staffing

services to Visual Pak. When Elite staffed an employee at Visual Pak, the employee was

required to enroll in an employee database using a fingerprint scan. Visual Pak and Elite used the

employee database to “monitor the time worked by each of the hourly workers at Visual Pak.”

The data collected by Visual Pak was transferred to Elite for payroll purposes.

¶8 Luis Sanchez was one such employee; he worked for Visual Pak (via Elite Staffing) as a

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warehouse worker from February through April 2016. Sanchez was required to scan his

fingerprint at the beginning and end of each workday. According to the amended complaint,

Visual Pak “collected, stored, used, or disseminated” Sanchez’s fingerprints without his consent

and without any policies in place regarding the retention and deletion of his fingerprints from the

database. Visual Pak failed to inform him of how his biometric information would be used. Nor

did Visual Pak provide him with a release for the use of his biometric information.

¶9 This, Sanchez alleged, was a violation of the Biometric Information Privacy Act, or

“BIPA.” See 740 ILCS 14/15 (West 2016). He filed this BIPA suit on February 28, 2018.

¶ 10 In that suit, Sanchez sought a declaratory judgment that Visual Pak violated BIPA. The

amended complaint sought certification of a class. Sanchez also prayed for injunctive and

equitable relief requiring Visual Pak’s compliance with BIPA. And he sought damages for the

willful violation of BIPA or, in the alternative, statutory damages and attorney fees. See id. § 20.

¶ 11 II. Visual Pak’s Tender of BIPA Suit for Defense

¶ 12 Regarding what happened after the filing of the BIPA lawsuit, we draw our facts from the

counterclaim filed here and accept those allegations as true. See Pekin Insurance Co. v. Wilson,

237 Ill. 2d 446, 455 (2010) (in considering judgment on pleadings, well-pleaded allegations in

non-movant’s pleadings are accepted as true).

¶ 13 At all relevant times, Visual Pak had three different insurance policies in place. All three

were affiliates of CNA. Two of them (National Fire Insurance and Continental Insurance) are

plaintiffs here. They provided general liability insurance to Visual Pak—National Fire, a

commercial general liability policy, and Continental Insurance, an excess/umbrella policy of

general liability coverage. Through the remainder of our discussion, for ease of reference and to

distinguish them from the third, non-party insurer, we will follow the lead of the parties in their

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briefs and refer to National Fire and Continental Insurance collectively as the “CNA plaintiffs.”

¶ 14 Visual Pak’s third policy was provided by a third CNA affiliate, Continental Casualty

Insurance Company (Continental Casualty). The Continental Casualty policy was not a general

liability policy but an employment practices liability policy.

¶ 15 There is no dispute that Visual Pak tendered defense of the BIPA action to this third

insurer, Continental Casualty, 10 days after the BIPA suit was filed—March 8, 2018. Subject to

a reservation of rights, Continental Casualty provided defense and indemnification to Visual Pak

through the conclusion of the BIPA suit based on its employment practices liability coverage.

¶ 16 Parenthetically, we note that there is very much a dispute over whether Visual Pak’s

tender of that suit to Continental Casualty constituted a tender to the CNA plaintiffs, as well. The

CNA plaintiffs insist that they were not tendered the defense until two years later, in April 2020.

But as we noted above, given the posture in which we find this matter, we will assume the truth

of the allegations in the counterclaim filed against the CNA plaintiffs. See id. The counterclaim

alleges that the CNA plaintiffs were tendered defense of the BIPA action on March 8, 2018; that

is the fact we will assume to be true.

¶ 17 In any event, with Continental Casualty providing the defense of Visual Pak, the BIPA

suit proceeded through attempts at settlement, including multiple mediations. In April 2020, the

CNA plaintiffs acknowledged tender of the defense; in May, they denied coverage of their

general liability and excess/umbrella coverages.

¶ 18 Sometime in 2021, the circuit court granted preliminary approval for a class action.

Visual Pak estimated that the class of former employees whose BIPA rights were allegedly

violated numbered over 13,000 people.

¶ 19 As best we can understand from the complaint, which is a bit contradictory in its

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description of the settlement, the BIPA suit settled for $19.5 million. Visual Pak agreed to pay

$3.5 million in a confession of judgment and assigned its claims against the CNA plaintiffs to

Sanchez and the plaintiff class in the BIPA action. Technically, then, in this declaratory

judgment action regarding insurance coverage, Sanchez is the defendant, not Visual Pak, and we

will refer to him and not Visual Pak in our analysis where necessary.

¶ 20 III. Declaratory Judgment Action

¶ 21 The CNA plaintiffs filed this action, seeking a declaration that the CNA plaintiffs owed

no duty to defend or indemnify Value Pak in the BIPA action. Sanchez filed a counterclaim for

declaratory judgment, claiming that the CNA plaintiffs owed Value Pak duties to defend and

indemnify.

¶ 22 The CNA plaintiffs moved for judgment on the pleadings. In addition to arguing that

Visual Pak was entitled to coverage under the terms of the policies, Sanchez argued that the

CNA plaintiffs were estopped from asserting a denial of coverage, given their two-year delay in

responding to Visual Pak’s tender of coverage and their belated filing of this declaratory

judgment action.

¶ 23 The circuit court was initially moved by Sanchez’s argument. The court ruled that there

was a “question of fact” as to whether Visual Pak was entitled to coverage and a “question of

fact” as to whether the CNA plaintiffs were estopped from asserting a denial of coverage, given

the delay in their actions.

¶ 24 The CNA plaintiffs moved for reconsideration, arguing that estoppel did not apply here,

because the plain language of the policies showed that the BIPA action fell within an exclusion,

and the doctrine of estoppel only intervenes to prevent an insurer from raising certain defenses to

coverage. In other words, estoppel should only be considered if the court first determines that a

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duty to defend exists; if it does not, the matter should come to an end in favor of the insurer.

¶ 25 In a second written order, the circuit court granted the motion to reconsider and granted

the CNA plaintiffs’ motion for judgment on the pleadings. The circuit court agreed with the

CNA plaintiffs that no duty to defend or indemnify existed under the policies, and the question

of estoppel was thus inapplicable. This appeal followed.

¶ 26 ANALYSIS

¶ 27 A motion for judgment on the pleadings, for all practical purposes, is akin to a motion for

summary judgment limited to the pleadings. In re Appointment of Special Prosecutor, 2019 IL

122949, ¶ 52; see 735 ILCS 5/2-615(e) (West 2020). The court considers only those facts

apparent from the face of the pleadings, along with judicial admissions and matters subject to

judicial notice. In re Appointment of Special Prosecutor, 2019 IL 122949, ¶ 52. As already

noted, we assume the truth of all well-pleaded allegations set forth in the non-movant’s

pleadings—here, the counterclaim filed by Sanchez. Wilson, 237 Ill. 2d at 455. Judgment on the

pleadings is proper, as in summary judgment, when there is no genuine issue of material fact,

and the movant is entitled to judgment as a matter of law. Id. Our review is de novo. Id.

¶ 28 There are two questions before us. First, whether the CNA plaintiffs owed a duty under

the policies to defend and indemnify Value Pak in the BIPA suit. And second, whether the

doctrine of estoppel plays a role in the outcome.

¶ 29 I

¶ 30 We first consider whether the CNA plaintiffs’ policies required coverage for Value Pak.

We begin with the duty to defend, which is broader than the duty to indemnify. Id. at 456. If

there is no duty to defend, there is obviously no duty of indemnification, either. Id.

¶ 31 In determining a duty to defend, the court compares the allegations in the underlying

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complaint with the relevant portions of the insurance policy. Id. at 455. If the facts alleged in the

underlying complaint even potentially fall within the policy’s coverage, the insurer must defend

the insured in the underlying lawsuit. Id.

¶ 32 In construing an insurance policy, we strive to give effect to the intention of the parties as

evidenced by the policy’s language. Id. If the language is clear and unambiguous, we give the

words their plain and ordinary meaning. Id. at 455-56. If the language is susceptible to more than

one meaning, we resolve the ambiguity in favor of the insured. Id. at 456. We construe the policy

as a whole and consider the type of insurance purchased, the nature of the risks involved, and the

overall purpose of the contract. Id. We interpret the language from the standpoint of the insured.

See Founders Insurance Co. v. Munoz, 237 Ill. 2d 424, 433 (2010).

¶ 33 We start with a review of the amended complaint in the underlying BIPA suit. The

amended complaint alleges that, in obtaining and sharing its workers’ fingerprint scans, Visual

Pak violated BIPA in that it failed to do the following:

“a. Properly inform Plaintiffs and others similarly situated in writing of the

specific purpose and length of time for which their fingerprints were being collected,

stored, disseminated and used, as required by BIPA;

b. Provide a publicly available retention schedule and guidelines for permanently

destroying Plaintiffs’ and other similarly-situated individuals’ fingerprints, as required by

BIPA; and

c. Receive a written release from Plaintiffs and others similarly situated to collect,

store, disseminate or otherwise use their fingerprints, as required by BIPA.”

¶ 34 The amended complaint contains three counts that allege these violations of BIPA

generally and section 15 specifically. See 740 ILCS 14/15 (West 2016).

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¶ 35 We now compare those allegations to the policy language. Among other things, the

policy covers liability for “personal and advertising injury,” defined as an “injury, including

consequential bodily injury, arising out of one or more of the following offenses:

“a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. The wrongful eviction from, wrongful entry into, or invasion of the right of

private occupancy of a room, dwelling or premises that a person occupies, committed by

or on behalf of its owner, landlord or lessor;

d. Oral or written publication, in any manner, of material that slanders or libels a

person or organization or disparages a person’s or organization’s goods, products or

services;

e. Oral or written publication, in any manner, of material that violates a person’s

right of privacy;

f. The use of another’s advertising idea in your advertisement; or

g. Infringing upon another’s copyright, trade dress or slogan in your

advertisement.” (Emphasis added.)

¶ 36 Sanchez argues that Visual Pak’s liability for a violation of BIPA would constitute

liability described under subsection (e) above for “oral or written publication, in any manner, of

material that violates a person’s right of privacy.” We need not spend much time on this analysis,

for our supreme court has conclusively resolved this question.

¶ 37 In West Bend Mutual Insurance Co. v. Krishna Schaumburg Tan, Inc., 2021 IL 125978,

the supreme court considered whether the insurer had a duty to defend an insured in an

underlying BIPA suit. There, the policy similarly provided liability coverage for “an injury, other

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than bodily injury, arising out of an oral or written publication of material that violates a person’s

right of privacy.” Id. ¶ 49. The court found that the underlying BIPA complaint pleaded an injury

in that the underlying plaintiffs pleaded emotional and mental injury stemming from the sharing

of biometric information. Id. The court likewise found that the dissemination of one’s biometric

information constituted “publication” under the policy. Id. ¶ 43.

¶ 38 The court then found that the unauthorized sharing of one’s biometric information

constituted “publication of material that violates a person’s right of privacy.” Id. ¶¶ 36, 45-46.

The court reasoned that the right of privacy includes the protection of two distinct rights—

“seclusion and secrecy.” Id. ¶ 45. “Courts define the right to secrecy as the right to keep certain

information confidential,” while “[c]ourts define the right to seclusion as the right to be left alone

and protecting a person from another’s prying into their physical boundaries or affairs.” Id. The

court found that the sharing of one’s biometric information constituted the violation of the

“secrecy interest—here, the right of an individual to keep his or her personal identifying

information like fingerprints secret.” Id. ¶ 46. Thus, the underlying BIPA suit fell within the

scope of coverage.

¶ 39 Here, the underlying BIPA complaint alleges that Visual Pak “violated Plaintiff’s and the

Class’s rights to privacy in their biometric identifiers or biometric information as set forth in

BIPA.” It also alleges that Visual Pak’s unauthorized retention and sharing of biometric

information “have raised a material risk that Plaintiff’s and the Class’s biometric data will be

unlawfully accessed by third parties.”

¶ 40 So there is no question, nor do the CNA plaintiffs challenge, that a defense of the

underlying BIPA suit falls within the coverage language of the policies. The controversy here

involves the policy’s exclusions, on which the CNA plaintiffs rely to claim they owed no duty to

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defend Visual Pak in the underlying BIPA action. We move to that analysis next.

¶ 41 II

¶ 42 The CNA plaintiffs rely on three different exclusions in the policy. We start with an

exclusion that will bear resemblance to the exclusion at issue in West Bend—which we will call

the “violation-of-law exclusion”—but which contains a difference in language that many courts

have found to be sufficiently material that West Bend is not directly controlling.

¶ 43 Indeed, until recently, the interpretation of the identical violation-of-law exclusion at

issue before us had divided the courts—courts that consisted exclusively of federal district courts

applying Illinois law. The majority of decisions, considering the same policy language as before

us, concluded that the defense of a BIPA lawsuit was not excluded from coverage under the

violation-of-law exclusion. See, e.g., Thermoflex Waukegan, LLC v. Mitsui Sumitomo Insurance

USA, Inc., No. 21 C 788, 2023 WL 319235, at *5-*7 (N.D. Ill. Jan. 19, 2023); Citizens Insurance

Co. of America v. Highland Baking Co., No. 20-cv-04997, 2022 WL 1210709, at *1 (N.D. Ill.

Mar. 29, 2022); Citizens Insurance Co. of America v. Thermoflex Waukegan, LLC, 588 F. Supp.

3d 845, 853-54 (N.D. Ill. 2022). Other cases, looking at the same language, found that the

violation-of-law exclusion did, in fact, exclude coverage.

¶ 44 A few months ago, the United States Court of Appeals for the Seventh Circuit weighed

in, holding that nearly identical exclusion language as in our case did not preclude defense of an

underlying BIPA lawsuit; the insurer owed a duty to defend. See Citizens Insurance Co. of

America v. Wynndalco Enterprises, LLC, 70 F.4th 987, 997 (7th Cir. 2023). That decision, of

course, abrogated the federal district court decisions that found the violation-of-law exclusion

applicable. See Continental Western Insurance Co. v. Cheese Merchants of America, LLC, 631

F. Supp. 3d 503 (N.D. Ill. 2022), abrogated by Wynndalco, 70 F.4th 987; State Auto Property &

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Casualty Insurance Co. v. Fruit Fusion, Inc., 631 F. Supp. 3d 638, 645 (S.D. Ill. 2022),

abrogated by Wynndalco, 70 F.4th 987.

¶ 45 But we are obviously not bound by a federal court’s interpretation of Illinois law, be it a

decision from a district court or a federal appellate court. See Travelers Insurance Co. v. Eljer

Manufacturing, Inc., 197 Ill. 2d 278, 302 (2001). So we will consider all the case law, even if

some of those decisions, in some sense, are no longer “good law” on the subject, because from

our perspective as an Illinois appellate court, we are bound by none of these decisions and are

open to persuasion by any of them.

¶ 46 A

¶ 47 In determining whether the violation-of-law exclusion bars coverage here, our starting

point must be West Bend, 2021 IL 125978, which considered whether a similar violation-of-law

exclusion barred coverage of an underlying BIPA action. As already noted, the supreme court

found that the coverage language in that policy included coverage for liability arising under

BIPA claims. The court then turned to the violation-of-law exclusion in that policy, which read

as follows:

“ ‘This insurance does not apply to:

***

“Bodily injury”, “property damage”, “personal injury” or “advertising injury”

arising directly or indirectly out of any action or omission that violates or is alleged to

violate:

(1) The Telephone Consumer Protection Act (TCPA) [(47 U.S.C. § 227

(2018))], including any amendment of or addition to such law; or

(2) The CAN-SPAM Act of 2003 [(15 U.S.C. § 7701 (Supp. III 2004))],

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including any amendment of or addition to such law; or

(3) Any statute, ordinance or regulation, other than the TCPA or CAN-

SPAM Act of 2003, that prohibits or limits the sending, transmitting, communicating

or distribution of material or information.’ ” Id. ¶ 9.

¶ 48 Because a violation of BIPA was not explicitly listed, the question in West Bend was

whether a lawsuit alleging a BIPA violation fell within the general catch-all language in

subsection (3). The court applied the interpretive doctrine of ejusdem generis, which provides

that “ ‘where general words follow an enumeration of persons or things, by words of a particular

and specific meaning, such general words are *** to be held as applying only to persons or

things of the same general kind or class as those specifically mentioned.’ ” Id. ¶ 57 (quoting

Black’s Law Dictionary 517 (6th ed. 1990)).

¶ 49 The court first pointed to the title of the exclusion, “ ‘Violation of Statutes that Govern E-

Mails, Fax, Phone Calls or Other Methods of Sending Material or Information.’ ” (Emphasis in

original.) Id. ¶ 58. The court noted that “all the items listed in the title are methods of

communication.” Id. Likewise, the two statutes explicitly listed in the exclusion were statutes

that regulated methods of communication; the Telephone Consumer Protection Act of 1991

(TCPA) regulates the sending of unsolicited telephone calls and faxes, while the CAN-SPAM

Act of 2003 (CAN-SPAM Act) governs unsolicited e-mails. West Bend, 2021 IL 125978, ¶ 58.

Thus, under the doctrine of ejusdem generis, the general catch-all provision would apply only to

other statutes that likewise regulate modes of communication. Id.

¶ 50 BIPA, “on the other hand, does not regulate methods of communication but regulates the

collection, use, safeguarding, handling, storage, retention, and destruction of biometric identifiers

and information.” Id. ¶ 55. Thus, said the court, “since [BIPA] is not a statute of the same kind as

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the TCPA and the CAN-SPAM Act and since [BIPA] does not regulate methods of

communication, the violation of statutes exclusion does not apply to [BIPA claims].” Id. ¶ 58.

¶ 51 The court then added this: “Moreover, to the extent that the ‘other than’ language in West

Bend’s policies may be viewed as ambiguous, it must be construed in favor of finding coverage

for the insured.” Id. ¶ 59. The exclusion thus did not apply, and West Bend owed its insured a

duty to defend the underlying BIPA lawsuit.

¶ 52 We turn now to the exclusion in our policy, which we print here in full:

“2. Exclusions. This insurance does not apply to:

p. Recording And Distribution Of Material Or Information In Violation Of

Law

Personal and advertising injury arising directly or indirectly out of any

action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA),

including any amendment of or addition to such law;

(2) The CAN-SPAM Act of 2003, including any

amendment of or addition to such law;

(3) The Fair Credit Reporting Act (FCRA), and any

amendment of or addition to such law, including the Fair and

Accurate Credit Transactions Act (FACTA); or

(4) Any federal, state or local statute, ordinance or

regulation, other than the TCPA, CAN-SPAM Act of 2003 or

FCRA and their amendments and additions, that addresses,

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prohibits, or limits the printing, dissemination, disposal, collecting,

recording, sending, transmitting, communicating or distribution of

material or information.” (Emphasis added.)

¶ 53 As BIPA is obviously not one of the statutes identified in subsections (1) through (3) of

the exclusion, the CNA plaintiffs argue that a lawsuit alleging a violation of BIPA falls within

the catchall exclusion of subsection (4) for any other statute, not previously identified in the

exclusion, that governs “the *** dissemination, disposal, collecting, recording, sending,

transmitting, communicating, or distribution of material or information.”

¶ 54 We begin with two essential observations. First, the catchall exclusion here is broader

than that in West Bend, which merely described a statute “ ‘that prohibits or limits the sending,

transmitting, communicating or distribution of material or information.’ ” Id. ¶ 9. Some of the

different verbs used in our exclusion are synonyms of the language in West Bend—

“disseminating,” for example, does not add much—but “disposal, collecting, [and] recording”

undoubtedly broaden the exclusion at issue here.

¶ 55 And second, if we merely isolated this catchall language, it is simply impossible to deny

that it describes BIPA. BIPA regulates the collection, dissemination, and disposal of one’s

biometric identifiers and information. See Rosenbach v. Six Flags Entertainment Corp., 2019 IL

123186, ¶ 20 (BIPA “imposes on private entities *** various obligations regarding the

collection, retention, disclosure, and destruction of biometric identifiers and biometric

information.”); 740 ILCS 14/15(b), (d) (West 2014) (“[n]o private entity may collect, capture,

purchase, receive through trade, or otherwise obtain a person’s or a customer’s biometric

identifier or biometric information” absent disclosure and consent; “[n]o private entity in

possession of a biometric identifier or biometric information may disclose, redisclose, or

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otherwise disseminate a person’s or a customer’s biometric identifier or biometric information”

absent disclosure and consent).

¶ 56 Indeed, even the Seventh Circuit, which for different reasons found this exclusion

inapplicable to BIPA actions, conceded that “[t]here is no dispute that a literal, plain-text reading

of the catch-all provision would include BIPA violations.” Wynndalco, 70 F.4th at 997. We are

aware of no reported decision that has found otherwise.

¶ 57 Because our provision contains materially different language than the catchall provision

in West Bend, and because the language of our catchall provision clearly encompasses a violation

of BIPA, we are tempted to stop there and find that the exclusion bars coverage. The supreme

court in West Bend did not stop there, however, and given the controversy over this provision,

we will continue with our analysis, following the lead of our supreme court and invoking the

ejusdem generis canon.

¶ 58 The interpretive canon ejusdem generis, which literally means “of the same kind,” seeks

to identify a common theme among a list of items, a theme that would provide a limitation on the

more general, catchall language that follows that list. See Norton v. Southern Utah Wilderness

Alliance, 542 U.S. 55, 63 (2004) (“ejusdem generis *** attribute[s] to the last item *** the same

characteristic of discreteness shared by all the preceding items”); Pooh-Bah Enterprises, Inc. v.

County of Cook, 232 Ill. 2d 463, 492 (2009) (“Under the ejusdem generis doctrine, when a

statutory clause specifically describes several classes of persons or things and then includes

‘other persons or things,’ the word ‘other’ is interpreted to mean ‘other such like.’ ”).

¶ 59 We emphasize, however, that the canon ejusdem generis is not some inexorable

command that must always result in limiting the general terms by virtue of the specific ones that

precede it; sometimes, the language is not readily susceptible to such a limitation, or the canon

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would result in an outcome contrary to the intent of the contracting parties or the legislature. See,

e.g., Southwest Airlines Co. v. Saxon, 596 U.S. ___, ___, 142 S. Ct. 1783, 1791-92 (2022)

(“Ejusdem generis neither demands nor permits that we limit a broadly worded catchall phrase

based on an attribute that inheres in only one of the list’s preceding specific terms.”); Ali v.

Federal Bureau of Prisons, 552 U.S. 214, 227 (2008) (“we do not woodenly apply limiting

principles every time Congress includes a specific example along with a general phrase”);

McReynolds v. People, 230 Ill. 623, 633 (1907) (“The rule ejusdem generis, moreover, does not

apply ‘where the specific words signify subjects greatly different from one another, for here the

general expression might very consistently add one more variety; in such case, the general term

must receive its natural and wide meaning.’ ”); Interstate Steel Co. v. Ramm Manufacturing

Corp., 108 Ill. App. 3d 404, 406-07 (1982) (ejusdem generis not applicable when it is clear that

invoking canon would lead to result contrary to intent of contracting parties).

¶ 60 In applying this canon, we begin, as in West Bend, with the exclusion’s title. Our

exclusion is entitled, “Recording And Distribution Of Material Or Information In Violation Of

Law.” Unlike the title in West Bend, this title is not limited to modes of communication. True,

the word “distribution” may not add anything materially different from the title in West Bend,

2021 IL 125978, ¶ 58, which referred to statutes governing the “sending” of material or

information. But the word “recording” is a different story.

¶ 61 “Recording” is the gerund of the verb “record,” which has many meanings but which,

relevant here, the dictionaries define as “to cause (sound, visual images, data, etc.) to be

registered on something (such as a disc or magnetic tape) in reproducible form.” 1 Another

1 Merriam-Webster Online Dictionary, “Record;” https://www merriam-webster.com/dictionary/record (site last visited Oct. 12, 2023).

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defines it as “to put or set down in writing or some other permanent form.” 2 Another: “to set

down in writing or the like, as for the purpose of preserving evidence.” 3 Finally: “to keep

information for the future, by writing it down or storing it on a computer,” or “to store sounds or

moving pictures using electronic equipment so that they can be heard or seen later.” 4 Indeed,

even the noun form of “record,” when used in this context, means “[i]nformation that is inscribed

on a tangible medium or that, having been stored in an electronic or other medium, is retrievable

in perceivable form.” 5

¶ 62 Beyond the differences in titles, the statutes specifically listed in our exclusion here are

more numerous, too. Our exclusion includes the TCPA and CAN-SPAM Act, as in West Bend,

but also the Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 et seq. (2018)) and its

amendment, the Fair and Accurate Credit Transactions Act of 2003 (FACTA) (15 U.S.C. § 1601

et seq. (2018)).

¶ 63 As discussed, the TCPA and CAN-SPAM Act govern unsolicited communications via

phone, fax, or e-mail. See West Bend, 2021 IL 125978, ¶ 58. In contrast, the FCRA “seeks to

promote ‘fair and accurate credit reporting’ and to protect consumer privacy” by “regulat[ing]

the consumer reporting agencies that compile and disseminate personal information about

consumers.” TransUnion LLC v. Ramirez, 594 U.S. ___, ___, 141 S. Ct. 2190, 2200 (2021).

Indeed, “the FCRA’s protection of consumer credit information is akin to the common law’s

protection of private information through the tort of invasion of privacy. To safeguard consumer

credit information, Congress *** [made] it unlawful to furnish, obtain, or use a consumer’s

2 Oxford English Online Dictionary, “Record;” https://www.oed.com/search/dictionary/?scope=Entries&q=record (site last visited Oct. 12, 2023). 3 Dictionary.com, “Record;” https://www.dictionary.com/browse/record (site last visited Oct. 12, 2023). 4 Cambridge Online Dictionary, “Record;” https://dictionary.cambridge.org/dictionary/english/record (site last visited Oct. 12, 2023). 5 RECORD, Black’s Law Dictionary (11th ed. 2019).

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credit information without a permissible purpose.” Persinger v. Southwest Credit Systems, L.P.,

20 F.4th 1184, 1192 (7th Cir. 2021).

¶ 64 Clearly, the FCRA and FACTA do not share the same theme of the TCPA and CAN-

SPAM Act, which govern “methods of communication.” West Bend, 2021 IL 125978, ¶ 58.

Other courts reviewing this identical language concur. See Wynndalco, 70 F.4th at 1002

(“Plainly, it is not possible here as it was in [West Bend] to limit the exclusion to statutes

regulating methods of communication ***.”); Cheese Merchants, 631 F. Supp. 3d at 518;

Citizens Insurance Co. of America v. Wynndalco Enterprises, LLC, 595 F. Supp. 3d 668, 675

(N.D. Ill. 2022), aff’d, 70 F.4th 987.

¶ 65 But that does not mean that the four statutes could not share some other common theme.

When employing the ejusdem generis canon, “ ‘[t]he common quality suggested by a listing

should be its most general quality—the least common denominator, so to speak—relevant to the

context.’ ” Cheese Merchants, 631 F.Supp. 3d at 521 (quoting Antonin Scalia & Bryan A.

Garner, Reading Law The Interpretation of Legal Texts 196 (2012)).

¶ 66 The CNA plaintiffs argue that there is, in fact, a theme common to these listed statutes,

even if it is not the same theme as in West Bend. In their different ways, they say, these statutes

and other laws share the common denominator of protecting personal privacy.

¶ 67 Recall that our supreme court, in finding that a BIPA violation fell within the policy’s

coverage for publication of material that violates one’s personal privacy, noted that “the right to

privacy includes two primary privacy interests: seclusion and secrecy” and deemed a BIPA

violation as falling within the secrecy interest: “the right of an individual to keep his or her

personal identifying information like fingerprints secret.” West Bend, 2021 IL 125978, ¶¶ 45-46.

¶ 68 The Seventh Circuit agreed that the four statutes listed in our exclusion “encompass two

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distinct types of privacy: seclusion and secrecy.” Wynndalco, 70 F.4th at 1003. The TCPA and

CAN-SPAM Act address seclusion, “the right to be left alone” (id.), while the FCRA and

FACTA concern secrecy, “the right to maintain the confidentiality of one’s personal

information.” Id.; see Cheese Merchants, 631 F. Supp. 3d at 518 (FCRA and FACTA “address a

different type of privacy” than TCPA and CAN-SPAM Act).

¶ 69 The Seventh Circuit, however, disagreed that the four statutes in the violation-of-law

exclusion could be grouped together under a general theme of protecting privacy. There was

“nothing in the language of the exclusion—be it in the title or in any of the provisions that

follow—which points to privacy as the focus of the exclusion.” Wynndalco, 70 F.4th at 1003.

The court did not find that theme to be “obvious to the type of layperson or business purchasing

this policy.” Id. In the court’s view, it would require “a relatively sophisticated and nuanced

examination of the four statutes” to glean a theme of protecting personal privacy. Id. at 1003-04.

¶ 70 We agree that in employing the ejusdem generis canon, we should read the language

from the standpoint of the insured; we should always interpret an insurance policy from that

viewpoint. See Founders, 237 Ill. 2d at 433. But respectfully, we think the Seventh Circuit gave

too little credit to the reasonable person purchasing this business liability policy. We do not

consider it particularly nuanced to note that the TCPA and CAN-SPAM Act deal with a

consumer’s freedom from unwanted solicitations, while the FCRA and FACTA protect a

consumer’s confidentiality in his or her financial information. Nor do we deem it especially

sophisticated for an insured purchasing this business liability insurance to understand that these

groups of statutes touch on various aspects of an individual’s personal privacy, though not

precisely in the same way.

¶ 71 We would likewise find more significance in the title and in the language of the catchall

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provision than did the Seventh Circuit. But first, we must flag one point here about the title. As

noted above, the Seventh Circuit found nothing in the title of the exclusion hinting at a theme of

privacy. Wynndalco, 70 F.4th at 1003. But this is the one difference that exists between the

exclusion the Seventh Circuit considered and the one before us. While everything else in the

exclusion is all but identical—with only the most inconsequential differences—the title of the

exclusion in the Seventh Circuit’s Wynndalco decision was “Distribution of Material in Violation

of Statutes.” Id. at 993. In contrast, the title of the exclusion before us is “Recording And

Distribution Of Material Or Information In Violation Of Law.” (Emphasis added.)

¶ 72 That is no small difference. We might agree with the Seventh Circuit that the phrase

“distribution of material” does not scream “privacy.” But the same cannot be said of our title.

The “[r]ecording *** of *** information in violation of law” certainly brings to mind the secrecy

prong of the privacy interest—the notion of illegally taking and keeping a record of one’s

information. Indeed, it is hard to imagine what else it could mean; in what other context would it

be illegal to keep a record of someone’s information, if it were not personal, confidential

information?

¶ 73 Likewise, we disagree with the Seventh Circuit that the language of the catchall does not

admit of a privacy gloss. Again, the catchall references the violation of any statute, ordinance, or

regulation, besides the four statutes specified, that governs the “printing, dissemination, disposal,

collecting, recording, sending, transmitting, communicating or distribution of material or

information.” Some of those words only make sense in the context of the secrecy element of

privacy—disposal, collecting, and recording of information. The others are entirely consistent

with privacy, though not limited to privacy. But taken together with the title’s reference to

“recording *** of *** information,” and with the four statutes that address personal privacy in

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their different ways, we do not find it unreasonable at all to read into this exclusion the gloss of

statutes that protect personal privacy.

¶ 74 So once again—we could stop there. We could determine that the plain and ordinary

interpretation of the catchall exclusion includes BIPA violations, as we did earlier, or we could

find, as we have just done, that the doctrine of ejusdem generis limits the scope of the catchall to

the violation of statutes or other laws that protect personal privacy—which would still include

violations of BIPA. Either way, violations of BIPA are included within the catchall exclusion,

and the CNA plaintiffs owe no duty to defend.

¶ 75 Still attempting to find a limiting gloss, and unable to do so with ejusdem generis, the

Seventh Circuit next employed the related canon noscitur a sociis (id. at 1004), which means “it

is known from its associates.” (Internal quotation marks omitted.) American Family Mutual

Insurance Co., S.I. v. Carnagio Enterprises, Inc., No. 20 C 3665, 2022 WL 952533, at * 9 (N.D.

Ill. Mar. 30, 2022); see Dynak v. Board of Education of Wood Dale School District 7, 2020 IL

125062, ¶ 22.

¶ 76 We will not belabor the point; the Seventh Circuit could not find a limiting gloss based

on that canon for the same reason it could not with ejusdem generis. See Wynndalco, 70 F.4th at

1004 (“As we have discussed, there are no readily-discernible clues in the text surrounding the

catch-all provision that point to privacy as the factor that harmonizes the catch-all with the other

provisions of the violation-of-statutes exclusion.”).

¶ 77 In the end, it makes no difference to the outcome of our analysis whether we employ the

limiting gloss of ejusdem generis, because the result is the same. If we limit the meaning of the

catchall phrase as limited to the protection of personal privacy, the catchall excludes coverage

for liability arising from BIPA lawsuits, which clearly concern personal privacy. If we cannot

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limit that catchall phrase, then the phrase is given its full breadth as written—and likewise

excludes coverage for BIPA liability. See Harrison v. PPG Industries, Inc., 446 U.S. 578, 589

(1980) (rejecting attempt to limit phrase based on ejusdem generis and construing phrase “to

mean exactly what it says, namely, any other final action.” (emphasis in original)); People v.

Diggins, 235 Ill. 2d 48, 57 (2009) (rejecting State’s attempt to limit meaning of “case” based on

noscitur a sociis canon; “we conclude that the legislature used the broad general term ‘case’

unmodified”); Cheese Merchants, 631 F. Supp. 3d at 517 (construing same catchall exclusion as

here: “Unless there is a discernible principle running through all of the specifics, ejusdem generis

does not apply, and the general term receives its full breadth.”).

¶ 78 Simply summarized, the catchall provision is amenable to a reasonable limiting

construction of statutes or other laws that protect personal privacy. BIPA is clearly one such

statute. So an underlying lawsuit alleging a violation of BIPA would fall under the catchall

phrase of the violation-of-laws exclusion. But even if we were wrong and the ejusdem generis

canon is incapable of limiting the scope of the catchall phrase, the result would be the same.

Absent some limiting gloss, the phrase receives its full breadth. The catchall, without a limiting

gloss, plainly and obviously includes BIPA lawsuits. In either event, the exclusion applies, and

the CNA plaintiffs owed no duty to defend.

¶ 79 B

¶ 80 The Seventh Circuit took a different path and ultimately reached the opposite conclusion.

Though it found no interpretive canon helpful in cabining the breadth of the catchall language,

the court did not proceed as we would have expected and apply the language as written, without

limitation. Instead, in effect, the Seventh Circuit found the language too broad—that is, so broad

that it would eviscerate a good amount of the coverage offered by the insurer. From that, the

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court declared the entire catchall phrase ambiguous, at which point it relied on the doctrine that

ambiguous provisions in an insurance policy are resolved in favor of the insured. See Wilson,

237 Ill. 2d at 456. And thus, the violation-of-law exclusion did not apply, and the insurer owed a

duty to defend. As we explain in more detail below, we disagree with the Seventh Circuit’s

reasoning and holding.

¶ 81 The Seventh Circuit began its analysis by writing that, under Illinois law, “a court should

construe a policy so as to harmonize its provisions and avoid reading an exclusion in such a way

that it removes the coverage explicitly provided elsewhere in the policy.” Wynndalco, 70 F.4th at

996. The court explained that,

“[i]n some instances, the language of a policy exclusion may appear clear in isolation, but

when compared with a separate policy provision granting coverage for the same type of

action or injury that the exclusion ostensibly reaches, an ambiguity arises, in that the

exclusion appears to take away with one hand coverage that the policy purports to give

with the other. [Citations.] The cases sometimes refer to this as the exclusion appearing to

‘swallow’ the coverage that the policy purports to grant the insured.” Id.

¶ 82 Though the court recognized that “[t]here is no dispute that a literal, plain-text reading of

the catch-all provision would include BIPA violations” (id. at 997), the court thought the catchall

provision was just such an example of an exclusion that “swallowed” the coverage provision,

thereby rendering it ambiguous:

“[A] plain-text reading of the exclusion gives rise to an ambiguity with respect to what

the policy does or does not cover. The Citizens policy purports, in the first instance, to

provide liability coverage for a ‘personal and advertising injury,’ which the policy

defines broadly to include not only the oral or written publication of material that violates

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a person’s right of privacy [citation] but also, inter alia, the oral or written publication of

material that slanders or libels a person or organization or disparages a person’s or

organization’s goods, products or services [citation]; the use of another’s advertising idea

in one’s own “advertisement,” [citation]; and infringing upon another’s copyright, trade

dress, or slogan in one’s own “advertisement” [citation]. [Citation.] These are all injuries

that are subject to, or potentially subject to, statutory causes of action. [Citations.]

Reading the exclusion’s catch-all provision literally and broadly would essentially

exclude from the policy’s coverage injuries resulting from all such statutory prohibitions,

as they all have to do with the recording, distribution, and so forth of information and

material.” Id. at 997-98.

¶ 83 Because, in the court’s view, “the broad language of the catch-all exclusion purports to

take away with one hand what the policy purports to give with the other in defining covered

personal and advertising injuries,” the exclusion was ambiguous, and the ambiguity must be

resolved in favor of coverage. Id. at 998.

¶ 84 We cannot agree with the Seventh Circuit’s analysis. We do not find it to be an accurate

reflection of Illinois law. We find two fundamental flaws in the court’s reasoning. First, under

Illinois law, the fact that an exclusion has a “broad sweep” (id. at 1004) is not, in and of itself, a

reason to deem the coverage “illusory” (id. at 998). It is only when the exclusion has the effect of

“swallowing” (id.) the coverage entirely that the exclusion can be deemed illusory—and this is

plainly not the case here. And second, the fact that the exclusion might “conflict” (id.) or “clash”

(id. at 1004) with other provisions of the coverage that are not presently at issue in this case is

not a basis to invalidate the exclusion as applied to this case; our job is not to seek out other

problems and solve them, but rather to adjudicate the controversy presently before us. We

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explain our reasoning below.

¶ 85 1

¶ 86 We start with the beginning of the court’s analysis, when the court spoke of the need to

“avoid reading an exclusion in such a way that it removes the coverage explicitly provided

elsewhere in the policy,” what it referred to as the exclusion “ ‘swallowing’ ” or “nullify[ing]”

the coverage explicitly provided. Id. at 996. For that proposition, the court cited several decisions

from Illinois. We do not read those cases nearly as broadly as the Seventh Circuit.

¶ 87 Several of those decisions—the source of the “swallowing” and “nullifying” comments—

concerned an intentional-act exclusion in a homeowner’s liability policy that, if read literally,

would exclude coverage not only for intentional acts but for negligent and innocent acts—

meaning all acts, rendering the coverage illusory. See Lincoln Logan Mutual Insurance Co. v.

Fornshell, 309 Ill. App. 3d 479, 484 (1999) (“If the exclusionary clause denied coverage for

negligent or innocent acts as well, the clause would contradict and swallow the entire personal

liability policy.”); General Agents Insurance Co. of America, Inc. v. Midwest Sporting Goods

Co., 328 Ill. App. 3d 482, 486 (2002) (“The policy purports to exclude coverage for any injury

arising from an intentional act, regardless of whether the insured intended or expected the injury.

This clause, read expansively in favor of the insurer, would nullify coverage for almost all

negligent acts.”); Bohner v. Ace American Insurance Co., 359 Ill. App. 3d 621, 627 (2005)

(McLaren, J., dissenting) (“it is contrary to the parties’ intentions to interpret such a provision to

deny coverage for negligent or innocent acts as well, because the clause would contradict and

swallow the entire personal liability policy”).

¶ 88 These cases cited by the Seventh Circuit stand for the common-sense proposition that an

insurer’s interpretation of an exclusion will not be adopted if that interpretation would altogether

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eliminate or “swallow” the coverage on which the insured relies. An exclusion that is interpreted

to deny coverage for not only intentional acts but also accidental and negligent acts results in a

policy that covers no acts. Insureds may choose to limit their coverage and pay reduced

premiums accordingly, but nobody would buy insurance that provides no coverage whatsoever.

But as we will explain below, we do not face that situation here; the exclusion at issue here does

not come close to wholly erasing the insured’s coverage.

¶ 89 The remaining cases cited by the Seventh Circuit are garden-variety examples of conflicts

in language that generate an ambiguity, resulting in an interpretation that favors the insured. In

Jones v. Universal Casualty Co., 257 Ill. App. 3d 842, 849 (1994), a “notice” provision in the

policy allowed the insured to seek coverage within two years of the accident. This notice

provision specifically identified any claim under “part II” of the policy within its scope. Id.

When the insured sought recovery for a hit-and-run accident, which fell within part II of the

policy, the insurer claimed that the insured violated a more restrictive notice provision for hit-

and-run accidents. Id. This court noted “a conflict between the notice provisions of the policy,”

which it resolved in favor of the insured. Id.

¶ 90 Mosby v. Mutual Life Insurance Co. of New York, 405 Ill. 599, 601 (1950), concerned

disability policies. The heading of the policy, bold and enlarged, read: “ ‘Benefits in the Event of

Total and Permanent Disability Before Age 60.’ ” Id. The policy language required that the

insured, “ ‘before attaining the age of sixty years *** furnish due proof’ ” of disability. Id. The

insurer argued that, even if the insured became disabled before age 60, he was not entitled to

coverage because he did not furnish proof of that disability before age 60. Our supreme court

deemed the contrast between the bold, large-print promise and the fine-print language “so

misleading as to create an ambiguity which must be resolved in favor of the insured.” Id. at 607.

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¶ 91 In another case, Yates v. Farmers Automobile Insurance Ass’n, 311 Ill. App. 3d 797, 798

(2000), the insured purchased insurance for two vehicles with $50,000 in uninsured-motorist

coverage for each vehicle. After an accident, he sought to “stack,” or aggregate, the two

coverages into $100,000 in coverage. Id. The policy contained an anti-stacking provision, but the

declarations page listed coverage for each vehicle as “50/100”—meaning coverage of $100,000

per accident. Id. at 800. In other words, the declarations language said the insured could stack,

but another provision said he could not. This court found that “[t]he insurance policy contains

provisions that are ambiguous and contradictory” and thus construed the ambiguity in favor of

the insured, granting him $100,000 of coverage. Id. 6

¶ 92 We have no quarrel with any of these decisions cited by the Seventh Circuit, but we take

issue with how the Seventh Circuit applied those decisions to reach its decision. We have several

reasons, both general in nature and specific to the exclusion at issue here.

¶ 93 The general observation is that we must be extremely careful when talking about

“conflicts” in policy language because every exclusion, to some degree, conflicts with the

coverage provision. That is the very reason for the exclusion; it is an exception to the general

rule of coverage. Which is why they must be specifically stated in the policy—if they were not,

the general rule of coverage would apply. See Rich v. Principal Life Insurance Co., 226 Ill. 2d

359, 379 (2007) (“An exclusion in an insurance policy serves the purpose of taking out persons

or events otherwise included within the defined scope of coverage.” (Internal quotation marks

omitted.)). But the mere fact that an exception conflicts with the coverage provision does not, in

6 We glean little from the final case cited by the Seventh Circuit, Perry v. Fidelity National Title Insurance Co., 2015 IL App (2d) 150168. The discussion of a “conflict” there involved an argument by the insurer that a particular provision excluded coverage, but we deemed that argument forfeited, given that the insurer did not develop an argument or even cite the language of the exclusion. Id. ¶ 17.

27 No. 1-22-1160

and of itself, make it ambiguous—if it did, no exclusion would ever be upheld.

¶ 94 Conflict and ambiguity are not the same thing. If one were to say, “I love all vegetables,

except for asparagus,” the dislike of asparagus would conflict with the love of all vegetables. But

we would have no trouble understanding what was said. And if the exception were significantly

broader—“I love all vegetables except green ones”—we could still make sense of the statement.

Those are conflicts, but they are not ambiguous in the least.

¶ 95 On the other hand, if one said, “I love all vegetables except those that are grown,” we

would scratch our heads, as the exception does not just conflict with the rule but swallows it

whole. It is tantamount to saying, “I love all vegetables, except I do not love any vegetables.”

¶ 96 So if the exclusion wipes out all coverage, it is deemed illusory. Just as we saw in the

cases above: “We cover liability for all non-intentional acts, except we don’t cover negligent or

innocent acts—so basically, we don’t cover anything.” See Fornshell, 309 Ill. App. 3d at 484;

Midwest Sporting Goods, 328 Ill. App. 3d at 486; Bohner, 359 Ill. App. 3d at 627 (McLaren, J.,

dissenting).

¶ 97 But the mere breadth of an exclusion, alone, does not equate to ambiguity, nor does it

render the coverage illusory. “The policy need not provide coverage against all possible

liabilities; if it provides coverage against some, the policy is not illusory.” Nicor, Inc. v.

Associated Electric & Gas Insurance Services Ltd., 362 Ill. App. 3d 745, 754 (2005), aff’d, 223

Ill. 2d 407 (2006); see American Country Insurance Co. v. Kraemer Brothers, Inc., 298 Ill. App.

3d 805, 814 (1998) (policy was not illusory, even though it excluded claims for negligence, as it

covered claims of strict liability; “Just because there are fewer strict liability claims than

negligence claims does not make the coverage illusory.”); Mashallah, Inc. v. West Bend Mutual

Insurance Co., No. 20 C 5472, 2021 WL 679227, at *4 (N.D. Ill. Feb. 22, 2021) (applying

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Illinois law), aff’d, 20 F.4th 311 (7th Cir. 2021).

¶ 98 In any event, we do not agree that the catchall exclusion here eviscerates the coverage

provision on which the insured relies. As noted earlier, the subpart of the “personal and

advertising injury” coverage on which the insured relies, subpart (e), provides coverage for

liability arising from “[o]ral or written publication, in any manner, of material that violates a

person’s right of privacy.” And the catchall exclusion, again, denies coverage for liability arising

from the violation of statutes or other laws that govern “the printing, dissemination, disposal,

collecting, recording, sending, transmitting, communicating or distribution of material or

information.”

¶ 99 Does the catchall exclusion completely eliminate coverage under subpart (e)? Far from it.

True, it excludes all statutory causes of action. But it does not exclude any common-law actions

whatsoever, and thus it would not exclude any of the “four ways to state a [common-law] cause

of action for invasion of privacy in Illinois: (1) intrusion upon the seclusion of another,

(2) appropriation of another’s name or likeness, (3) public disclosure of private facts, and

(4) publicity placing another in a false light.” Flores v. Aon Corp., 2023 IL App (1st) 230140,

¶ 51; see Lawlor v. North American Corp. of Illinois, 2012 IL 112530, ¶ 33 & n.4; Busse v.

Motorola, Inc., 351 Ill. App. 3d 67, 71 (2004).

¶ 100 Each of these four privacy-based causes of action easily fits within subsection (e)’s

coverage for the publication of material that violates a person’s right to privacy. See Flores,

2023 IL App (1st) 230140, ¶ 51 (elements of intrusion upon seclusion are “(1) the defendant

committed an unauthorized intrusion or prying into the plaintiff’s seclusion; (2) the intrusion

would be highly offensive or objectionable to a reasonable person; (3) the matter intruded on was

private; and (4) the intrusion caused the plaintiff anguish and suffering” (internal quotation

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marks omitted)); Ainsworth v. Century Supply Co., 295 Ill. App. 3d 644, 648 (1998) (to state

claim for appropriation of likeness or name, complaint must allege “an appropriation, without

consent, of one’s name or likeness for another’s use or benefit” (internal quotation marks

omitted)); Miller v. Motorola, Inc., 202 Ill. App. 3d 976, 978 (1990) (to state claim for public

disclosure of private facts, complaint must allege that “(1) publicity was given to the disclosure

of private facts; (2) the facts were private, and not public, facts; and (3) the matter made public

was such as to be highly offensive to a reasonable person”); Lovgren v. Citizens First National

Bank of Princeton, 126 Ill. 2d 411, 418-19 (1989) (cause of action for false-light invasion of

privacy requires showing that defendant gave publicity to matter concerning plaintiff that placed

plaintiff in false light).

¶ 101 Companies face these lawsuits for such things as allowing the disclosure of “private facts

about plaintiffs, such as their financial history, medical history, and beneficiary information.”

Flores, 2023 IL App (1st) 230140, ¶ 52. Or for spying on one’s own employees and thus

obtaining private information about employees’ “family problems, health problems, sex lives,

future work plans, and attitudes about [the employer].” Johnson v. K Mart Corp., 311 Ill. App.

3d 573, 579 (2000).

¶ 102 Indeed, for what it’s worth, in dicta, a concurring judge on another case before the

Seventh Circuit hinted that even BIPA violations, themselves, might be capable of reduction to

common-law claims; a BIPA violation could, in theory, “be comparable to injuries in invasion-

of-privacy and unjust enrichment cases that the law has long recognized.” Thornley v. Clearview

AI, Inc., 984 F.3d 1241, 1249 (7th Cir. 2021) (Hamilton, J., concurring). The judge cited a

Restatement provision concerning the appropriation of another’s name or likeness for one’s own

use or benefit, the very provision on which Illinois decisions rely to recognize that common-law

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invasion-of-privacy action. See id. (Hamilton, J. concurring) (citing Restatement (2d) of Torts

§ 652C (1977)); Ainsworth, 295 Ill. App. 3d at 648.

¶ 103 Each of these common-law invasion-of-privacy claims would be covered by the policy

per subsection (e), and none of them would be excluded by the catchall provision, which only

excludes liability for statutory actions. So in no way could we conclude that the catchall

exclusion wholly eviscerates or “swallows” subsection (e)’s coverage.

¶ 104 Nor, subsection (e) aside, could we say that the catchall exclusion eliminates the vast

majority of the other coverage under “personal and advertising injury.” The catchall would not

preclude coverage for subparts (a) through (c) of the coverage—liability for false arrest, false

imprisonment, malicious prosecution, wrongful eviction, or trespass. None of those involve the

dissemination, recording, collection, or disposal of materials or information. And those causes of

action are usually, if not always, asserted as common-law actions, not violations of statute.

¶ 105 Subpart (d), governing oral or written defamation, could be asserted as a statutory

action—a violation of the Slander and Libel Act (740 ILCS 145/0.01 et seq. (West 2022))—but

defamation actions are routinely prosecuted as common-law actions in Illinois courts; they are, in

fact, far more common than statutory defamation claims. Our exclusion would not bar coverage

for a common-law defamation claim.

¶ 106 As for subsection (f) of the “personal and advertising injury” coverage, while the Seventh

Circuit correctly noted that claims for disparagement of one’s goods or services may be

redressable under a state statute, common-law claims may arguably lie, as well. See, e.g.,

Imperial Apparel, Ltd. v. Cosmo’s Designer Direct, Inc., 367 Ill. App. 3d 48, 60 (2006) (“Illinois

recognizes commercial disparagement as a tort separate and distinct from the tort of

defamation.”), aff’d in part, rev’d in part on other grounds, 227 Ill. 2d 381 (2008); Kole v.

31 No. 1-22-1160

Village of Norridge, 941 F. Supp. 2d 933, 963-64 (N.D. Ill. 2013) (applying Illinois law and

noting split in Illinois authority as to whether common-law claim of commercial disparagement

is recognized as separate tort from defamation).

¶ 107 So we are not presented with a situation where the violation-of-law exclusion swallows

or wholly nullifies the coverage for “advertising and personal injury.” And specific to our case,

the provision on which the insured relies for coverage, subsection (e) for the publication of

materials that violate one’s right to privacy, includes many common-law claims that the catchall

exclusion would not touch.

¶ 108 And that, under Illinois law, should be the end of any discussion that this catchall

exclusion is illusory. To again quote Justice Wolfson, “[a] policy need not provide coverage

against all possible liabilities; if it provides coverage against some, the policy is not illusory.”

Nicor, 362 Ill. App. 3d at 754; see Kraemer Brothers, 298 Ill. App. 3d at 814.

¶ 109 If we stray from that doctrine, we would have to start asking such unanswerable

questions as, “How broad an exclusion is too broad?” or “What percentage of the coverage can

be excluded (51 percent? 80 percent?) before the coverage is deemed illusory?” And doing so

will drag us into the dangerous zone of interfering with freedom of contract, for sometimes the

insured knowingly obtains limited coverage, and the premiums are set accordingly. See Braye v.

Archer-Daniels-Midland Co., 175 Ill. 2d 201, 215 (1997) (public policy of Illinois favors

freedom of contract); American Country Insurance Co. v. Cline, 309 Ill. App. 3d 501, 506-09

(1999) (coverage was not illusory, as it contained some limited coverage, and parties were free to

contract as such); Liberty Mutual Fire Insurance Co. v. Statewide Insurance Co., 352 F.3d 1098,

1101 (7th Cir. 2003) (applying Illinois law; coverage, though limited, was not illusory; parties’

right to freely contract should not be abridged unless coverage is entirely illusory).

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¶ 110 Because the catchall exclusion here did not eviscerate all or even nearly all coverage for a

“personal and advertising injury,” it cannot be deemed illusory.

¶ 111 2

¶ 112 Though it did not find the catchall exclusion wholly illusory, the Seventh Circuit was

particularly concerned with the last two subparts of “personal and advertising injury”—namely,

coverage for liability arising from “the use of another’s advertising idea in your advertisement”

and for “infringing upon another’s copyright, trade dress or slogan in your advertisement.” See

Wynndalco, 70 F.4th at 997. In those instances, the court noted, the only possible causes of

action to redress those violations were statutory causes of action that would be nullified by the

catchall exclusion. See id. at 997-98 (citing 15 U.S.C. § 1125(a), (c) (2018) (Lanham Act), 17

U.S.C. § 501 (2018) (federal Copyright Act of 1976 provision for civil infringement actions),

and 765 ILCS 1036/60 (West 2022) (Trademark Registration and Protection Act provision for

infringement suit)).

¶ 113 We would first note that, if our interpretive limiting gloss were applied to the catchall

exclusion—the violation of statutes or other laws that protect personal privacy—this would not

be a problem. None of these infringement or advertisement-misappropriation statutes would fall

within the exclusion as so limited; they do not implicate personal privacy interests. Indeed, that

is yet another reason to adopt our limiting gloss—we should construe policy language, when

possible, to avoid “nullify[ing] or render[ing] provisions meaningless.” Thompson v. Gordon,

241 Ill. 2d 428, 442 (2011); see Founders, 237 Ill. 2d at 433 (“When construing the language of

an insurance policy, we must assume that every provision was intended to serve a purpose.”).

¶ 114 That aside, the Seventh Circuit’s point establishes, at most, that the catchall exclusion

might irreconcilably conflict with a few provisions of the “personal and advertising injury”

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coverage. That may be so, but these provisions are not at issue in this case. The Seventh Circuit

identified ambiguities elsewhere in the policy, not in a comparison of the policy language

directly applicable to this case.

¶ 115 If that language were directly applicable to our decision—if, for example, the underlying

lawsuit were not a BIPA action but involved the Copyright Act of 1976—we would take that

question head-on. Presumably, we would either find an ambiguity in the conflict and resolve it in

favor of the insured, or we might invoke the canon we just mentioned and construe the policy so

as not to render any term meaningless—and likewise construe in favor of coverage.

¶ 116 But that language is not directly before us. We are aware of no authority in Illinois law,

nor did the Seventh Circuit cite any, for the proposition that a hypothetical conflict in language

that was not at issue before the court could permit the court to essentially nullify an entire

coverage exclusion as illusory, even though there is no such conflict between the coverage and

exclusion provisions at issue in the case before the court.

¶ 117 To the contrary, we do not search for other wrongs to right; we do not issue advisory

opinions; we resolve the controversy before us. People v. Austin M., 2012 IL 111194, ¶ 134;

People v. Givens, 237 Ill. 2d 311, 323-24 (2010); People ex rel. Partee v. Murphy, 133 Ill. 2d

402, 407-08 (1990). Here, the insured identifies specific language in the “personal and

advertising injury” provision that entitles it to coverage for a BIPA lawsuit—subsection (e), the

publication of materials that violate personal privacy. The catchall exclusion clearly covers BIPA

liability, but it does not eviscerate subsection (e)’s coverage completely; it only excludes

statutory claims, and plenty of common-law claims remain covered by that subsection. So the

exclusion is valid, and it applies. That should be the beginning and end of the analysis.

¶ 118 Make no mistake: we fully understand that a court may consider the insurance policy as a

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whole. See Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 416

(2006). But we do so for context, so we can give meaning to the competing provisions at issue in

the case before us. So there is certainly nothing wrong with taking into account subsections (f)

and (g) of the “personal and advertising injury” regarding advertising misappropriation and

intellectual property infringement when interpreting the catchall exclusion.

¶ 119 But it is improper to comb the policy for other conflicts or ambiguities and use them to

rule on the language before us. That sounds like an analysis more fitting to a constitutional

overbreadth challenge to determine if the exclusionary language simply sweeps too broadly and

might improperly impact other provisions in the policy. If the court were allowed to do that, then

every insurance-coverage case would turn into an overall referendum on the policy as a whole,

rather than a pinpoint analysis of a particular coverage provision versus a particular exclusion.

¶ 120 The underlying lawsuit here concerns BIPA. Liability for a BIPA violation is

unambiguously excluded from coverage. We thus respectfully disagree with the Seventh

Circuit’s decision in Wynndalco and hold that the CNA plaintiffs owed no duty to defend the

underlying BIPA lawsuit.

¶ 121 In light of this holding, we need not consider the other policy exclusions on which the

CNA plaintiffs rely to disclaim coverage.

¶ 122 III

¶ 123 We next consider Sanchez’s claim of estoppel. He says that, because the CNA plaintiffs

did not defend the underlying BIPA action under a reservation of rights or promptly file a

declaratory judgment action asserting that they owed no duty to defend, they are estopped from

now denying coverage. That is not a correct statement of the law.

¶ 124 The doctrine of estoppel in this context holds that, if an insurer believes that it owes no

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duty to defend, but it wishes to preserve any policy defenses it may have, it must do one of two

things: (1) file suit, seeking a declaratory judgment that it owes no duty to defend, or (2) defend

the suit under a reservation of rights. Employers Insurance of Wausau v. Ehlco Liquidating

Trust, 186 Ill. 2d 127, 150 (1999). If the insurer does neither of those things, the insurer will be

estopped later from asserting any policy defenses to coverage. Id. at 150-51.

¶ 125 But estoppel does not even factor into the equation if the court ultimately determines that

the insurer owed no duty to defend. Id. at 151. It is only if the insurer did, in fact, owe a duty to

defend that estoppel is even an issue. See id. at 151-52 (“Once the insurer breaches its duty to

defend, however, the estoppel doctrine has broad application and operates to bar the insurer from

raising policy defenses to coverage, even those defenses that may have been successful had the

insurer not breached its duty to defend.”); Uhlich Children’s Advantage Network v. National

Union Fire Co. of Pittsburgh, 398 Ill. App. 3d 710, 716 (2010) (“Because the estoppel doctrine

applies only where an insurer has breached its duty to defend, a court first ‘inquires whether the

insurer had a duty to defend and whether it breached that duty.’ ” (quoting Ehlco, 186 Ill. 2d at

151)).

¶ 126 Sanchez’s confusion may come from the language in the case law that an insurer who

fails to either timely file a declaratory judgment action or defend with a reservation of rights is

estopped from asserting “policy defenses to coverage.” Ehlco, 186 Ill. 2d at 150-51. Merely

arguing in court that the insurer does not owe a duty to defend is not asserting a “policy defense”

as that term is intended. A “policy defense” is, for example, a defense that the insured did not file

a timely claim or otherwise failed to comply with some condition precedent to coverage in the

policy. See id. at 152-53 (considering whether estoppel barred insurer from claiming late of

notice of claim); Uhlich, 398 Ill. App. 3d at 721 (after holding that insurer had duty to defend,

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holding that insurer was estopped from asserting late-notice provision in policy because it did not

promptly file declaratory judgment action or defend with reservation of rights).

¶ 127 Another example is a “voluntary assumption” provision requiring that, before the insured

“make[s] a payment; assume[s] any obligation; or incur[s] any expense” arising from liability,

the insured must obtain the insurer’s consent. See American Safety Casualty Insurance Co. v.

City of Waukegan, 776 F. Supp. 2d 670, 700-01 (N.D. Ill. 2011) (applying Illinois law; after

ruling that insurer owed duty to defend, finding that insurer was estopped from asserting

“voluntary assumption” policy defense), aff’d, 678 F.3d 475 (7th Cir. 2012).

¶ 128 To hold otherwise, to allow the estoppel question to precede the duty-to-defend question,

would be to give estoppel the power to magically rewrite a policy from one that does not obligate

the insurer to defend into one that does. Because the “estoppel doctrine applies only where an

insurer has breached its duty to defend” (Ehlco, 186 Ill. 2d at 151), and we have determined that

the CNA plaintiffs owed no duty to defend Visual Pak in the underlying lawsuit, the estoppel

doctrine has no application here.

¶ 129 The circuit court originally put the cart before the horse, considering the claim of

estoppel first and ruling against the CNA plaintiffs on that basis. But on reconsideration, the

court correctly reversed course, understanding that the question of duty-to-defend came first.

After determining that the CNA plaintiffs owed no duty to defend the underlying BIPA lawsuit,

the court correctly deemed the question of estoppel moot. We find no error in the circuit court’s

ultimate judgment.

¶ 130 CONCLUSION

¶ 131 The judgment of the circuit court is affirmed.

¶ 132 Affirmed.

37 No. 1-22-1160

National Fire Insurance Co. of Hartford v. Visual Pak Co., 2023 IL App (1st) 221160

Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2020-CH- 06897; the Hon. Thaddeus L. Wilson, Judge, presiding.

Attorneys Bradley K. Staubus, of Esposito & Staubus LLP, of Burr Ridge, for for appellants. Appellant:

Attorneys Todd S. Schenk and Jamie L. Gende, of Tressler LLP, of Chicago, for for appellees. Appellee:

Amicus Curiae: Molly McGinnis Stine and Hugh S. Balsam, of Locke Lord LLP, of Chicago, for amicus curiae American Property Casualty Insurance Association.