                                  Illinois Official Reports

                                         Appellate Court



             G.M. Sign, Inc. v. Pennswood Partners, Inc., 2014 IL App (2d) 121276



Appellate Court              G.M. SIGN, INC., Plaintiff and Defendant and Counterplaintiff-
Caption                      Appellee, v. PENNSWOOD PARTNERS, INC., Defendant-Appellee
                             and Cross-Appellant (Maryland Casualty Company and Assurance
                             Company of America, Plaintiffs and Counterdefendants-Appellants
                             and Cross-Appellees).


District & No.               Second District
                             Docket No. 2-12-1276

Filed                        March 24, 2014



Held                         In an action seeking a declaratory judgment that defendant’s insurers
(Note: This syllabus         had no duty to provide coverage for defendant in an underlying suit
constitutes no part of the   alleging that defendant violated the Telephone Consumer Protection
opinion of the court but     Act by sending unsolicited faxes, the entry of summary judgment for
has been prepared by the     defendant was reversed on the ground that under the applicable
Reporter of Decisions        Pennsylvania law, the underlying complaint did not allege an
for the convenience of       “accident” that was covered by defendant’s policies, and pursuant to
the reader.)                 Supreme Court Rule 366(a)(5), the appellate court entered summary
                             judgment for defendant’s insurers, the claim against one insurer for
                             statutory bad faith under Pennsylvania law was dismissed, and the
                             denial of the defendant’s request for accrued postsettlement interest
                             was affirmed.



Decision Under               Appeal from the Circuit Court of Lake County, Nos. 07-CH-757,
Review                       08-MR-153; the Hon. Margaret J. Mullen, Judge, presiding.



Judgment                     Reversed in part and affirmed in part; judgment entered.
     Counsel on              Michael M. Marick, Karen M. Dixon, and Timothy H. Wright, all of
     Appeal                  Meckler Bulger Tilson Marick & Pearson LLP, of Chicago, for
                             appellants.

                             Brian J. Wanca and David M. Oppenheim, both of Anderson &
                             Wanca, of Rolling Meadows, and Phillip A. Bock and Robert M.
                             Hatch, both of Bock & Hatch, LLC, of Chicago, for appellees.

                             Michael C. Borders and Rosa M. Tumialan, both of Dykema Gossett
                             PLLC, of Chicago, for amici curiae.




     Panel                   JUSTICE McLAREN delivered the judgment of the court, with
                             opinion.
                             Presiding Justice Burke and Justice Spence concurred in the judgment
                             and opinion.




                                              OPINION

¶1          G.M. Sign filed a class action complaint against Pennswood Partners (Pennswood), for
       sending it unsolicited faxes. Maryland Casualty Company (Maryland Casualty) and
       Assurance Company of America (Assurance) then filed a declaratory judgment action against
       Pennswood and G.M. Sign, seeking a declaration that their insurance policies did not provide
       coverage to Pennswood in the underlying lawsuit for the unsolicited faxes. Maryland
       Casualty and Assurance (collectively, Zurich) are underwriting insurance companies that
       issued insurance policies to Pennswood. Zurich filed a motion for summary judgment,
       arguing that there was no coverage under Pennsylvania law as predicted by federal courts in
       Pennsylvania. Pennswood and G.M. Sign argued that Illinois law applied and that under
       Illinois law there was coverage. The trial court initially granted summary judgment in favor
       of Zurich and against Pennswood and G.M. Sign. However, upon Pennswood and G.M.
       Sign’s motion to reconsider, the trial court withdrew its order and ultimately determined that
       the federal decisions did not establish a conflict between Pennsylvania law and Illinois law;
       therefore, Illinois law applied; and, under Illinois law, Zurich had a duty to defend
       Pennswood. Thus, the trial court granted summary judgment in favor of Pennswood and
       G.M. Sign. The trial court subsequently denied Pennswood and G.M. Sign’s request for
       accrued postsettlement interest.
¶2          Zurich appeals the trial court’s summary judgment in favor of Pennswood and G.M. Sign
       and against Zurich, arguing: (1) Illinois courts are vested with the discretion to consider
       federal courts’ predictions in their conflict-of-laws analysis; (2) in an insurance coverage
       case, a single state’s law should be applied to the interpretation of an insurance policy; and


                                                  -2-
     (3) Zurich had no duty to defend or indemnify Pennswood in the underlying action under
     Pennsylvania law. 1
¶3       Pennswood and G.M. Sign appeal the trial court’s denial of their request for accrued
     postsettlement interest. We reverse in part and affirm in part.

¶4                                       I. BACKGROUND
¶5        Pennswood, a Pennsylvania corporation with its principal and only place of business
     located in Wyomissing, Pennsylvania, provided executive placement services. Maryland
     Casualty is a Maryland corporation engaged in the insurance business, with its principal
     place of business in Illinois. Assurance is a New York corporation engaged in the insurance
     business, with its principal place of business also in Illinois. G.M. Sign is an Illinois
     corporation with its principal place of business located in Round Lake, Illinois.
¶6        On March 20, 2007, G.M. Sign filed a class action complaint 2 against Pennswood,
     alleging the following. Pennswood “transmitted by telephone facsimile machine unsolicited
     advertisements to [G.M. Sign’s] facsimile machine.” Pennswood “sent thousands of similar
     unsolicited facsimile advertisements to at least 39 other recipients.” Pennswood “knew or
     should have known that” it did not have the recipients’ permission or invitation to send them
     advertising. The complaint alleged that on two occasions in 2006 Pennswood faxed
     unsolicited advertisements to G.M. Sign. The three-count complaint alleged the following:
     (1) Pennswood violated the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C.
     § 227 (2006)), “by transmitting [the advertisements] to [G.M. Sign] and the other members
     of the class” and that Pennswood’s “actions caused damages to [G.M. Sign] and the other
     class members, because their receipt of [Pennswood’s] unsolicited fax advertisements caused
     them to lose paper and toner consumed as a result” and “cost [them] employee time”; (2)
     Pennswood was liable for common-law conversion of the plaintiffs’ “fax machine toner,
     paper, memory, and employee time”; and (3) Pennswood violated the Illinois Consumer
     Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2006)). The complaint
     alleged that a class action was proper in that “the class consists of forty or more persons in
     Illinois and throughout the United States and is so numerous that joinder of all members is
     impracticable.” The complaint alleged that members of the class received faxed unsolicited
     advertisements from Pennswood within three, four, and five years from the filing of the
     complaint. The complaint sought damages, an injunction, attorney fees, and the certification
     of the class.
¶7        On May 22, 2007, Pennswood tendered its defense to Zurich. In a letter dated July 23,
     2007, Zurich denied Pennswood’s tender of defense, disclaiming any obligation to defend or
     indemnify in the underlying class action.
¶8        On July 31, 2007, the parties to the underlying class action filed a motion in the trial
     court for approval of terms of a settlement agreement signed by the parties on July 27 and
     July 30, 2007. The settlement agreement provided that Pennswood agreed to allow entry of a

         1
          We granted leave to Property Casualty Insurers Association of America and National Association
     of Mutual Insurance Companies to file a joint brief as amici curiae in support of reversing the trial
     court’s summary judgment.

         2
          Case No. 07-CH-757.

                                                   -3-
       judgment against it in the amount of $8 million that would be enforceable only “against the
       proceeds of” the Zurich policies. In addition, Pennswood agreed to assign to the class its
       rights under the Zurich policies.
¶9         On October 30, 2007, following a fairness hearing, the trial court in the underlying class
       action granted Pennswood and G.M. Sign’s motion for approval of the settlement agreement
       and entered judgment in favor of the class and against Pennswood in the amount of $8
       million, “to be satisfied only from the proceeds of [Pennswood’s four Zurich] insurance
       policies.” The trial court also ordered G.M. Sign’s attorney to receive 33.33% of any
       recovery from Zurich, in accordance with the agreement. The trial court found the provisions
       of the agreement to be fair and reasonable. The trial court found that Pennswood faxed in
       excess of 80,000 unsolicited advertisements to the class between March 20, 2003, and
       December 1, 2003; faxed in excess of 160,000 unsolicited advertisements to the class
       between December 1, 2003, and December 1, 2004; faxed in excess of 160,000 unsolicited
       advertisements to the class between December 1, 2004, and December 1, 2005; and faxed in
       excess of 160,000 unsolicited advertisements to the class between December 1, 2005, and
       December 1, 2006. The trial court ordered that postsettlement interest would accrue from the
       date of the entry of the order. The trial court stated that its order was a “final and appealable
       order.”
¶ 10       Zurich issued four commercial general liability policies to Pennswood (the Zurich
       policies) that were in effect during the relevant time period of the allegations contained in
       G.M. Sign’s class action complaint. The policies were negotiated, delivered, and received in
       Pennsylvania. The premiums for the policies were paid by Pennswood from Pennsylvania.
¶ 11       Under “Coverage A,” the Zurich policies provide coverage for “bodily injury” and
       “property damage” caused by an “occurrence.” The policies define “occurrence” as an
       “accident, including continuous or repeated exposure to substantially the same general
       harmful conditions.” The policies define “property damage” as:
                    “a. Physical injury to tangible property, including all resulting loss of use of that
                property. All such loss of use shall be deemed to occur at the time of the physical
                injury that caused it; or
                    b. Loss of use of tangible property that is not physically injured. All such loss
                shall be deemed to occur at the time of the ‘occurrence’ that caused it[.]”
       The policies contain the following exclusion:
                “Expected Or Intended Injury:
                    ‘Bodily Injury’ or ‘property damage’ expected or intended from the standpoint of
                the insured.”
       Under “Coverage B,” the policies provide coverage for “personal and advertising injury”
       liability.
¶ 12       The policy in effect December 1, 2005, through December 1, 2006, also incorporates an
       endorsement applicable to “Coverage A,” entitled “Violation Of Communication Or Law
       Exclusion,” that provides:
                “This insurance does not apply to:
                Violation of Communication or Information of Law
                    ‘Bodily injury,’ ‘property damage’ or ‘personal and advertising injury’ resulting
                from or arising out of any actual or alleged violation of:

                                                   -4-
                      A. The Federal Telephone Consumer Protection Act (47 U.S.C. § 227), ***
                      B. Any other federal, state or local statute, regulation or ordinance that imposes
                  liability for the:
                           (1) Unlawful use of telephone, electronic mail, internet, computer,
                      facsimile machine or other communication or transmission device; or
                           (2) Unlawful use, collection, dissemination, disclosure or reclosure of
                      personal information in any manner by any insured or on behalf of any
                      insured.”
       Each Zurich policy at issue includes the following endorsement:
               “EXCLUSION–PERSONAL AND ADVERTISING INJURY
               This endorsement modifies insurance provided under the following:
                  COMMERCIAL GENERAL LIABILITY COVERAGE PART
                  COVERAGE B (Section I) does not apply and none of the references to it in the
               Coverage Part apply.”
       Each Zurich policy at issue contains the following condition:
                  “2. Duties In The Event Of Occurrence, Offense, Claim Or Suit
                                                   ***
                      c. You and any other involved insured must:
                                                   ***
                           (3) Cooperate with us in the investigation or settlement of the claim or
                      defense against the ‘suit’; and
                           (4) Assist us, upon our request, in the enforcement of any right against any
                      person or organization which may be liable to the insured because of injury or
                      damage to which this insurance may also apply.
                      d. No insured will, except at that insured’s own cost, voluntarily make a
                  payment, assume any obligation, or incur any expense other than first aid, without
                  our consent.”
¶ 13       On February 1, 2008, Zurich filed a three-count declaratory judgment action against
       Pennswood and G.M. Sign. 3 Zurich sought declarations that its policies provided no
       coverage: (1) because the underlying action did not involve “property damage” caused by an
       “accident,” and because coverage was precluded by the “expected or intended” injury
       exclusion; (2) because “Coverage B” (covering “personal and advertising injury”) was not
       purchased and is excluded by the policies; and (3) due to Pennswood’s breach of contract.
       The class action suit and the declaratory judgment suit were consolidated by the trial court.
¶ 14       On November 13, 2008, G.M. Sign filed a counterclaim for declaratory relief.
       Subsequently, G.M. Sign filed an amended counterclaim, asserting an additional claim for
       statutory bad faith under Pennsylvania law. On May 6, 2011, the parties filed cross-motions
       for summary judgment only on the coverage issues. Pursuant to the trial court’s order, the
       cross-motions were not to address G.M. Sign’s bad-faith claim. Zurich moved for summary
       judgment on all counts of its declaratory judgment complaint. Pennswood and G.M. Sign
       moved for summary judgment on “all claims other than the bad faith claim reserved for
       future proceedings by Court order” and for judgment in their favor on the reasonableness of

          3
           Case No. 08-MR-153.

                                                   -5-
       the settlement, on Zurich’s duty to defend and indemnify, and in the amount of the
       settlement, plus accrued postsettlement interest.
¶ 15       After argument by counsel, the trial court issued a well-reasoned written order on
       September 9, 2011, granting Zurich’s motion. The trial court concluded that Illinois and
       Pennsylvania law were not in conflict on the issue of whether Coverage B was excluded from
       the policies; thus, the trial court applied Illinois law and determined that Coverage B was
       unambiguously excluded. The trial court then addressed whether “fax-blasting constitutes
       ‘property damage’ caused by an ‘occurrence’ within the meaning of the Policies.” The trial
       court addressed whether there was a conflict between Illinois and Pennsylvania law regarding
       this issue. The trial court considered Illinois appellate court decisions and, because there
       were no Pennsylvania supreme court or appellate court decisions regarding the issue, the trial
       court considered decisions from federal courts in Pennsylvania. The trial court concluded,
       “[i]t appears that Illinois’ rule allows broader coverage [than] Pennsylvania precedent, at
       least as analyzed by federal magistrate, district, and appellate judges, assumed to know the
       law in Pennsylvania.” The trial court concluded that a conflict existed, and it applied the
       choice-of-law analysis set forth in Lapham-Hickey Steel Corp. v. Protection Mutual Insurance
       Co., 166 Ill. 2d 520, 526-27 (1995). After considering the five factors enunciated in
       Lapham-Hickey, the trial court concluded that Pennsylvania law applied in interpreting the
       policy provisions, because it has the most significant contacts in this case. Pennsylvania’s
       law does not recognize “fax blasts as covered under that provision.” The trial court stated that
       it was unnecessary to determine the remaining issues and granted summary judgment in
       favor of Zurich and against Pennswood and G.M. Sign on counts I, II, and III of Zurich’s
       complaint for declaratory judgment and count I of G.M. Sign’s counterclaim.
¶ 16       Three weeks after the trial court’s September 9, 2011, order, the appellate court decided
       Pekin Insurance Co. v. XData Solutions, Inc., 2011 IL App (1st) 102769, ¶ 23 (holding that to
       determine the law of a sister state for the purpose of determining whether a conflict exists, a
       court could not consider federal court decisions because such decisions “only attempt to
       ‘predict’ [the state’s] law”). Based on XData, Pennswood and G.M. Sign filed a motion to
       reconsider the trial court’s September 9, 2011, order. The trial court granted the motion.
¶ 17       On October 12, 2012, after withdrawing its prior summary judgment, the trial court
       issued an order granting summary judgment in favor of Pennswood and G.M. Sign and
       against Zurich. Once again, the trial court concluded that Illinois and Pennsylvania law were
       not in conflict on the issue of whether Coverage B was excluded from the policies; therefore,
       the trial court applied Illinois law and determined that Coverage B was unambiguously
       excluded. However, the trial court changed its previous analysis regarding whether there was
       a conflict between Illinois and Pennsylvania law as to whether “fax-blasting constituted
       ‘property damage’ caused by an ‘occurrence’ within the meaning of the Policies.” Compelled
       by the recent decision, XData, the trial court stated that “[i]n order to determine if a conflict
       exists, this court may not consider the federal court rulings and predict Pennsylvania law.”
       The trial court, thus, concluded that there was no conflict between Illinois and Pennsylvania
       law and that, therefore, Illinois law applied. Under Illinois law, “fax blasting claims such as
       those alleged here trigger the duty to defend under the property damage clause.” Regarding
       the expected/intended exclusion, the trial court determined that there was no difference
       between Illinois and Pennsylvania law and that the exclusion did not bar coverage. The trial
       court also determined that the law of Pennsylvania and Illinois differs on the issue of


                                                   -6-
       estoppel against insurers that breach the duty to defend, but that the difference was
       immaterial here because the “underlying case was settled before trial [and, thus,] it is
       impossible to determine if the insured would have been liable for covered or uncovered
       counts.” Regarding whether TCPA damages are insurable as a matter of public policy, the
       trial court determined that the states’ law differs and that Pennsylvania law applied. The trial
       court also determined that Pennsylvania law applied to the issue of which damages are
       recoverable for Zurich’s alleged bad faith. The trial court granted summary judgment in favor
       of Pennswood and G.M. Sign and against Zurich on counts I, II, and III of Zurich’s
       complaint and count I of G.M. Sign’s counterclaim, declaring that (1) Zurich had a duty to
       defend Pennswood under the policies for the underlying suit; (2) Zurich breached that duty to
       defend; (3) Zurich owed a duty of indemnity for the settlement resulting from the underlying
       suit; and (4) the settlement was reasonable. The trial court also entered judgment in favor of
       G.M. Sign and the class.
¶ 18        On October 31, 2012, Zurich filed a motion for a finding under Illinois Supreme Court
       Rule 304(a) (eff. Feb. 26, 2010) that there was no just reason to delay the enforcement of, or
       appeal from, the judgment entered by the trial court on October 12, 2012.
¶ 19        On November 5, 2012, Pennswood and G.M. Sign filed a “Memorandum in Support of”
       accrued postsettlement interest. On November 9, 2012, the trial court entered judgment in
       favor of G.M. Sign in the amount of $8 million, denied Pennswood and G.M. Sign’s request
       for accrued postsettlement interest, and granted Zurich’s Rule 304(a) motion.
¶ 20        Zurich filed its notice of appeal on November 9, 2012. On November 13, Pennswood and
       G.M. Sign filed their notice of cross-appeal from the portion of the trial court’s November 9
       order denying their request for accrued postsettlement interest.

¶ 21                                          II. ANALYSIS
¶ 22       Zurich urges this court to reverse the trial court’s summary judgment in favor of
       Pennswood and G.M. Sign and against Zurich.
¶ 23       Summary judgment is appropriate only where the pleadings, depositions, admissions, and
       affidavits, viewed in the light most favorable to the nonmovant, show that no genuine issue
       of material fact exists and that the moving party is entitled to judgment as a matter of law.
       735 ILCS 5/2-1005(c) (West 2010). “By filing cross-motions for summary judgment, the
       parties agree that no factual issues exist and this case turns solely on legal issues subject to
       de novo review.” Gaffney v. Board of Trustees of the Orland Fire Protection District, 2012 IL
       110012, ¶ 73.
¶ 24       Furthermore, the “purpose of a motion to reconsider is to bring to the court’s attention
       newly discovered evidence that was not available at the time of the hearing, changes in the
       law or errors in the court’s previous application of existing law.” Pence v. Northeast Illinois
       Regional Commuter R.R. Corp., 398 Ill. App. 3d 13, 16 (2010). “A ruling on a motion to
       reconsider is typically reviewed for an abuse of discretion, but a motion to reconsider a grant
       of summary judgment typically questions the trial court’s application of existing law,” and
       the grant or denial of such a motion is reviewed de novo. See Wilfong v. L.J. Dodd
       Construction, 401 Ill. App. 3d 1044, 1063 (2010).
¶ 25       In general, when a court must resolve a case in which multiple jurisdictions have an
       interest, the court applies the choice-of-law rules of its own state to determine which state’s


                                                  -7-
       law will apply. Townsend v. Sears, Roebuck & Co., 227 Ill. 2d 147, 155 (2007). To determine
       which jurisdiction’s law applies, a court must first isolate the issue, define the conflict, and
       determine whether the law of the interested jurisdictions conflicts. See id. at 155-56. A
       choice-of-law determination is required only when a difference in law will make a difference
       in the outcome. Id. at 155. The party seeking the choice-of-law determination bears the
       burden of demonstrating that a conflict exists. Because Zurich seeks a choice-of-law
       declaration, it bears the burden of demonstrating that a conflict exists. See Chicago Board
       Options Exchange, Inc. v. International Securities Exchange, L.L.C., 2012 IL App (1st)
       102228, ¶ 44. We review de novo a trial court’s decision on a choice-of-law issue. Townsend,
       227 Ill. 2d at 153-54.
¶ 26        In many respects, courts in Pennsylvania and Illinois interpret insurance policies and
       determine insurers’ duties in a similar manner. In both states, courts interpret insurance
       policies to give effect to the intention of the parties, as that intention is expressed by the
       language of the policies when given its plain and ordinary meaning. Valley Forge Insurance
       Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 362-63 (2006); Kvaerner Metals Division
       of Kvaerner U.S., Inc. v. Commercial Union Insurance Co., 908 A.2d 888, 897 (Pa. 2006).
       Similarly, in both states, an insurer has a duty to defend if the underlying complaint alleges
       facts within, or potentially within, the policy’s coverage provisions. United States Fidelity &
       Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 73 (1991); Gedeon v. State Farm
       Mutual Automobile Insurance Co., 188 A.2d 320, 321-22 (Pa. 1963).
¶ 27        The parties disagree as to whether there is a conflict between the states regarding whether
       a duty to defend was triggered in this case. Zurich argues that there is a conflict between the
       states regarding whether the unsolicited-faxes claims contained in the underlying complaint
       are covered under the policies’ “property damage” provision. Zurich recognizes that,
       pursuant to Illinois law, it owed a duty to defend Pennswood. See Insurance Corp. of
       Hanover v. Shelborne Associates, 389 Ill. App. 3d 795, 803 (2009) (holding that, under
       Illinois law, the duty to defend was triggered under the property damage provision of the
       insured’s policy where claim alleged violations of the TCPA); see also Valley Forge
       Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 364-65 (2006) (Illinois
       recognizes a duty to defend a class action complaint asserting violations of the TCPA).
       However, Zurich argues that, under Pennsylvania law, it did not owe a duty to defend,
       because the complaint did not allege “property damage” caused by an “occurrence” as
       defined in the policies. Zurich contends that under Pennsylvania law an “occurrence,” as
       defined in the policies as an “accident,” does not apply to intentional acts such as sending
       faxes.
¶ 28        The parties agree that no published decision of the Pennsylvania supreme or appellate
       courts has addressed the precise issue of whether a commercial liability policy covers claims
       for violations of the TCPA as property damage. However, Zurich cites to decisions of federal
       courts sitting in diversity in Pennsylvania in support of its position. Zurich argues that the
       trial court erred by following XData, 2011 IL App (1st) 102769, and, thereby, failing to
       consider those federal decisions to determine whether a conflict of law existed.
¶ 29        Pennswood and G.M. Sign argue that there is no conflict between the two states. They
       argue that the trial court properly disregarded the federal court decisions, pursuant to XData,
       and that, therefore, the trial court properly applied Illinois law. Pennswood and G.M. Sign


                                                  -8-
       argue that the trial court properly determined that Zurich had a duty to defend and properly
       granted summary judgment in their favor.
¶ 30       In XData, 2011 IL App (1st) 102769, Targin, an Illinois corporation, filed a class action
       lawsuit against XData, an Indiana corporation, for faxing unsolicited ads to Targin in
       violation of the TCPA. Id. ¶ 3. Targin also sued for conversion of its paper and toner used in
       the fax machine. Id. ¶ 4. XData tendered defense of the lawsuit to its insurer, Pekin, which
       promptly filed a complaint seeking a judgment declaring that, under Indiana law, it had no
       duty to defend XData. Id. ¶ 5. The parties agreed that no published decision of the Indiana
       state courts had addressed the issue of whether a commercial liability policy covered claims
       for violations of the TCPA as either advertising injury or property damage. Id. ¶¶ 11, 25.
       Pekin relied on two decisions of federal courts sitting in Indiana. Id. ¶ 23.
¶ 31       The XData court held:
               “[W]e agree with the circuit court that there is no Indiana state law on the issue before
               us, so there can be no conflict with Illinois law. The two federal cases upon which
               Pekin relies merely acknowledge that they can only attempt to ‘predict’ Indiana law
               because there has been no state court decision on the issue. [Citation.] Accordingly,
               we cannot conclude that the federal cases represent Indiana state law for the purposes
               of engaging in a choice of law analysis. Therefore, since there is no Indiana state law
               on the issue of whether there can be coverage for a TCPA claim under an ‘advertising
               injury’ provision in an insurance policy, there can be no conflict with Illinois law, and
               Illinois law applies here.” Id. ¶ 23.
¶ 32       Subsequent to the trial court’s final summary judgment, a different division of the Illinois
       Appellate Court, First District, decided Bridgeview Health Care Center, Ltd. v. State Farm
       Fire & Casualty Co., 2013 IL App (1st) 121920, appeal allowed, No. 116389 (Ill. Sept. 25,
       2013), and declined to follow XData. Bridgeview filed a lawsuit against Jerry Clark, an
       Indiana resident, for faxing unsolicited ads to Bridgeview’s Chicago office in violation of the
       TCPA. Id. ¶ 5. Bridgeview also charged Clark with conversion of its paper and toner used in
       the fax machine and with violating the Illinois Consumer Fraud and Deceptive Business
       Practices Act (815 ILCS 505/2 (West 2006)). Bridgeview, 2013 IL App (1st) 121920, ¶ 5.
       Clark tendered defense of the lawsuit to its insurer, State Farm, which accepted the defense
       subject to a reservation of the right to deny coverage. Id. ¶ 6. Bridgeview filed a complaint
       against Clark and State Farm, seeking a judgment declaring that they had a duty to defend
       and indemnify Clark because the unsolicited faxes constituted property damage and
       advertising injury under the terms of the policy. Id. ¶ 7. State Farm filed a counterclaim,
       seeking a declaration that it had no duty to defend or indemnify. Id. On cross-motions for
       summary judgment, State Farm argued that Indiana law should apply because it had the most
       significant contacts. Id. ¶ 9. Bridgeview argued that Illinois law should apply because it had
       the most significant contacts and that there was no difference between the two states
       regarding whether State Farm had a duty to defend or indemnify. Id. The trial court,
       following the reasoning in XData, determined that State Farm had not shown that Indiana
       law conflicted with Illinois law. Id. ¶ 13. Thus, the trial court held that State Farm had a duty
       to defend and indemnify Clark because the unsolicited faxes constituted accidental property
       damage, and it granted summary judgment in favor of Bridgeview. Id.
¶ 33       On appeal, the appellate court held that the trial court erred by following the reasoning of
       XData. Id. ¶ 22. The appellate court reasoned that, when the law of another interested state is

                                                   -9-
       uncertain, the court must undertake a choice-of-law analysis to determine which
       jurisdiction’s law applies. Id. ¶ 19. It then stated:
               “Because no published decision of any Indiana state court has addressed the
               determinative issues in this case, the trial court should use decisions from the federal
               courts and the courts of other states, as well as law reviews, treatises, and other
               sources, in an attempt to predict how the Indiana courts would decide the
               determinative issues here.” Id. ¶ 22.
       We agree with the Bridgeview court.
¶ 34       On the question of whether we may consider federal decisions to determine whether a
       conflict exists, we decline to follow XData insofar as that court refused to acknowledge the
       federal decisions interpreting Indiana law as persuasive authority. See XData, 2011 IL App
       (1st) 102769, ¶ 23. The XData court’s refusal to consider the federal decisions was in
       contravention of United States Supreme Court authority. See Phillips Petroleum Co. v. Shutts,
       472 U.S. 797 (1985). In Shutts, to determine whether Texas law conflicted with Kansas law,
       the Supreme Court considered the decision of a federal district court applying Texas law and
       concluded that there was a conflict. Id. at 817-18.
¶ 35       Further, to determine whether a conflict of law exists regarding the interpretation of
       insurance policy terms, courts consider how state courts have interpreted and applied policy
       terms to different factual contexts. See Universal Underwriters Insurance Co. v. LKQ Smart
       Parts, Inc., 2011 IL App (1st) 101723, ¶ 51 (holding that Wisconsin law would interpret
       “physical damage or loss” to include a spoliation-of-evidence claim, based on a Wisconsin
       court’s decision that the term applied to a breach-of-contract claim). Accordingly, we will
       determine how Pennsylvania courts have interpreted the provision at issue as applied to
       similar factual allegations.
¶ 36       In this case, the Zurich policies provide liability coverage for “property damage” caused
       by an “occurrence,” and the policies define “occurrence” as an “accident.” Pennsylvania
       courts have interpreted “property damage” provisions similar to the provisions contained in
       the Zurich policies. See Kvaerner Metals, 908 A.2d 888; see also Erie Insurance Exchange v.
       Maier, 963 A.2d 907 (Pa. Super. Ct. 2008).
¶ 37       The Pennsylvania Supreme Court cautioned against “being overly inclusive in defining
       an ‘occurrence.’ ” Erie Insurance Exchange, 963 A.2d at 909 (citing Kvaerner Metals, 908
       A.2d 888). Thus, the Pennsylvania Supreme Court defined “occurrence” as the policies in
       this case have, as an “accident,” and it defined “accident” as “[a]n unexpected and
       undesirable event,” or “something that occurs unexpectedly or unintentionally.” (Internal
       quotation marks omitted.) Kvaerner Metals, 908 A.2d at 898. Therefore, intentional acts are
       not occurrences. Erie Insurance Exchange, 963 A.2d at 909. To determine whether an act is
       intentional, courts consider whether the insured “desired to cause the consequences of his act
       or if he acted knowing that such consequences were substantially certain to result.” United
       Services Automobile Ass’n v. Elitzky, 517 A.2d 982, 989 (Pa. Super. Ct. 1986). When an
       insured is alleged to have been negligent, the property damage or injury cannot be the result
       of an “accident” unless the damage or injury was unforeseeable, unexpected, or fortuitous.
       See Donegal Mutual Insurance Co. v. Baumhammers, 938 A.2d 286, 293 (Pa. 2007).
¶ 38       Regarding allegations of unsolicited faxes and TCPA violations, the United States Court
       of Appeals for the Third Circuit and the United States District Court for the Eastern District
       of Pennsylvania, applying Pennsylvania law, have held that an insurer did not have a duty to

                                                  - 10 -
       defend class action fax-blasting claims in cases similar to the case before us. Nationwide
       Mutual Insurance Co. v. David Randall Associates, Inc., No. 13-1515, 2014 WL 67888 (3d
       Cir. Jan. 9, 2014) 4; Melrose Hotel Co. v. St. Paul Fire & Marine Insurance Co., 432 F. Supp.
       2d 488, 507-09 (E.D. Pa. 2006), aff’d sub nom. Subclass 2 of the Master Class of Plaintiffs
       Defined & Certified in the January 30, 2006 & July 28, 2006 Orders of the Circuit Court of
       Cook County, Illinois in the Litigation Captioned Travel 100 Group, Inc. v. Melrose Hotel Co.,
       503 F.3d 339, 340 (3d Cir. 2007).
¶ 39       In Melrose, the insured (a hotel) hired a third party to send fax advertisements, and the
       recipients of the faxes filed a class action lawsuit against the insured, alleging violations of
       the TCPA, common-law conversion, and common-law trespass to chattels. Id. at 492-93. The
       underlying complaint alleged that the insured “[knew] or should have known that its
       appropriation of the paper and toner *** was wrongful and without authorization.” (Internal
       quotation marks omitted.) Id. at 493. The insurer claimed that it had no duty to defend,
       because the policy provided coverage only for accidental property damage. Id. at 505. On
       cross-motions for summary judgment, the Melrose court, applying Pennsylvania law, held
       that the insurer had no duty to defend, because the complaint alleged that the insured’s
       conduct was intentional and, therefore, not accidental. Id. at 504-05. The court was “not
       persuaded to the contrary simply because the [underlying] Complaint uses the phrase ‘should
       have known.’ ” Id. at 509. The court reasoned that the underlying complaint failed to allege
       that the insured accidently sent the faxes to those who did not consent to receiving them and
       failed to allege specific acts of negligence that made possible the intentional acts of the third
       party. Id. The court stated that the insured “knew that its actions would cause the very harm
       that the TCPA aims to prevent.” Id. at 510.
¶ 40       Similarly, in David Randall Associates, 2014 WL 67888, at *3, the United States Court of
       Appeals held that an insurer had no duty to defend or indemnify an insured against a class
       action complaint alleging that the insured and its director sent unsolicited faxes to the
       plaintiffs in violation of the TCPA. The policy provided coverage for “property damage,” but
       only if such damage was caused by an “occurrence,” which was defined as an “accident.” Id.
       at *1. The underlying complaint alleged that the insured “knew or should have known” that
       the plaintiffs had not given their express permission for the insured and its director to fax
       advertisements to the plaintiffs. Id. Like the Melrose court, the Court of Appeals rejected the
       insured’s argument that the “should have known” language was sufficient to allege
       negligence. Id. at *2 (citing Melrose, 432 F. Supp. 2d at 510). The court explained that the
       underlying complaint contained no factual allegations that the faxes were sent by accident,
       that the insured acted negligently, or that “it mistakenly believed the faxes were sent with the
       recipients’ permission.” Id. The court reasoned that, even if the insured had alleged
       negligence, the insured’s conduct did not qualify as an accident, because the damage caused
       by the insured was reasonably foreseeable. Id. at *3. The court stated that, although the
       insured and its director “might not have intended to violate the TCPA, they intended to send
       the faxes and knew that sending them would result in the use of the recipients’ paper, toner,
       and time.” Id. Therefore, the court held that the insurer had no duty under the terms of the
       policy to defend or indemnify the insured. Id.

          4
            David Randall Associates was submitted to this court by Zurich as supplemental authority after
       oral argument; however, we were aware of the case prior to Zurich’s submission.

                                                   - 11 -
¶ 41       We recognize that Pennsylvania courts are not bound by David Randall, Melrose, or any
       other decision of a federal court other than the United States Supreme Court. See Cresci
       Construction Services, Inc. v. Martin, 64 A.3d 254, 259 (Pa. Super. Ct. 2013). However,
       Pennsylvania courts may rely on David Randall and Melrose as well as other federal court
       decisions as persuasive authority. See id. Further, Illinois courts rely on federal court
       decisions to determine whether a conflict exists. See Banks v. RIBCO, Inc., 403 Ill. App. 3d
       646, 649 (2010) (relying on a federal decision interpreting an Iowa statute to determine
       whether a conflict of law exists); see also Sears, Roebuck & Co. v. National Union, 331 Ill.
       App. 3d 347, 352-53 (2002) (Illinois state courts have the discretion to rely on persuasive
       federal diversity decisions in predicting how a sister state’s supreme court would rule on a
       matter at issue). In addition, the United States Supreme Court has relied on federal decisions
       to determine state law in conflict-of-law analyses. See, e.g., Shutts, 472 U.S. at 817-18
       (relying on a federal decision interpreting Texas law).
¶ 42       The complaint in this case did not allege an accident under Pennsylvania law. The
       complaint alleged that Pennswood “transmitted by telephone facsimile machine [thousands
       of unsolicited advertisements] to Plaintiff[s’] facsimile machine[s].” Further, the complaint
       alleged that Pennswood’s action caused the plaintiffs to lose paper, toner, and use of their fax
       machines. Although the complaint also alleged that Pennswood “knew or should have
       known” that it did not have permission to send faxes to the plaintiffs, the complaint did not
       allege that Pennswood accidentally sent faxes to those who did not consent to receiving
       them. In addition, the complaint did not contain any specific factual allegations of
       Pennswood’s negligence that caused Pennswood’s intentional act of faxing unsolicited
       advertisements. Accordingly, we determine that, based on Pennsylvania’s state courts’
       interpretations of “property damage” and “accident,” and considering as persuasive the
       federal court decisions in David Randall and Melrose, the allegations in the complaint at
       issue would not be deemed to allege an “accident” under Pennsylvania law.
¶ 43       Pennswood and G.M. Sign cite Telecommunications Network Design Inc. v. Brethren
       Mutual Insurance Co., 83 Pa. D. & C.4th 265 (2007), to support their argument that there is
       no conflict between Illinois and Pennsylvania law. In Brethren, the class filed suit against
       both the policyholder and a third-party vendor who sent the faxes. Id. at 271. The
       Pennsylvania Court of Common Pleas held that the insurer had a duty to defend under the
       “property damage” provision of its policy because the court could not determine the
       relationship between the insured and the third-party vendor; it was possible that the
       third-party vendor sent the faxes to unwilling recipients without the insured’s knowledge.
       Id. at 276. In this case, the complaint did not allege a third-party vendor. Rather, it alleged
       that Pennswood sent the unsolicited faxes directly to the recipients. Further, nothing in the
       record indicates that Pennswood reasonably believed that it had the recipients’ permission.
       To the contrary, the record indicates that Pennswood’s owner’s belief that the recipients
       would like to receive the faxes was based only on his belief in the value of Pennswood’s
       products and not on any actual knowledge that he had the recipients’ consent. Therefore,
       Brethren is distinguishable from this case.
¶ 44       Pennswood and G.M. Sign also argue that there is coverage under the policies’ “property
       damage” provision because Pennswood did not intend to cause harm. Pennswood supports
       this argument with its owner’s statements that he believed it had the recipients’ consent and
       that it would not have sent the faxes if he had known that it did not have the recipients’


                                                  - 12 -
       consent. This “accidental fax” argument was rejected by the court in Melrose, 432 F. Supp.
       2d at 505 (citing Resource Bankshares Corp. v. St. Paul Mercury Insurance Co., 407 F.3d
       631, 638-39 (4th Cir. 2005)). Like the insured in Melrose, Pennswood did not investigate to
       determine whether the recipients had consented. Id. Further, nothing in the record supports a
       determination that Pennswood received express prior permission as required by the TCPA.
       47 U.S.C. § 227(a)(4) (2006) (forbidding all unsolicited fax advertisements and defining
       unsolicited faxes as those transmitted “with[out] *** prior express invitation or permission”).
¶ 45       In addition, Pennswood and G.M. Sign argue that there is no conflict between Illinois and
       Pennsylvania law regarding whether Zurich owed a duty to defend pursuant to the
       policies’ “property damage” provisions. They cite Elitzky, 517 A.2d 982, to support their
       argument. In Elitzky, the Pennsylvania Superior Court stated that “[i]nsurance coverage is not
       excluded because the insured’s actions are intentional unless he also intended the resultant
       damage.” Id. at 987. The court held that the insurer had a duty to defend because the
       underlying plaintiff could recover on his libel claim even if the insureds thought that their
       statements were true and thus had no intent to injure the plaintiff. Id. at 989. In this case, the
       record reveals that Pennswood intended the resultant damage or harm because Pennswood’s
       owner testified that he knew that the faxes would consume the recipients’ paper and toner.
       Thus, Elitzky does not support Pennswood and G.M. Sign’s position. Accordingly, a conflict
       exists between Illinois and Pennsylvania regarding whether Zurich owed Pennswood a duty
       to defend under the “property damage” provision of the policies.
¶ 46       Because we have determined that a conflict exists, we must undertake a choice-of-law
       analysis. See Townsend, 227 Ill. 2d at 155. Even if Pennsylvania law were uncertain, it would
       be prudent to consider that a conflict might exist between Pennsylvania and Illinois law and
       undertake a choice-of-law analysis. Sterling Finance Management, L.P. v. UBS PaineWebber,
       Inc., 336 Ill. App. 3d 442, 451 (2002).
¶ 47       It is undisputed that the policies at issue in this case contain no choice-of-law provision;
       thus, we apply the general choice-of-law rules of the forum state, Illinois, to determine which
       state’s law should apply. See Emerson Electric Co. v. Aetna Casualty & Surety Co., 319 Ill.
       App. 3d 218, 232 (2001). If an insurance policy does not specify a choice of law, the
       determination is generally governed by the following factors: (1) the location of the subject
       matter; (2) the place of delivery of the insurance policy; (3) the domicile of the insured or of
       the insurer; (4) the place of the last act to give rise to a valid insurance policy; and (5) the
       place of performance, or other place bearing a rational relationship to the general insurance
       policy. Lapham-Hickey, 166 Ill. 2d at 526-27. These factors do not have equal significance
       and are to be weighed according to the issue involved. Emerson Electric, 319 Ill. App. 3d at
       232. To assist in the application of the Lapham-Hickey analysis for the choice of law
       applicable to an insurance policy, consideration should be given to the justified expectations
       of the parties, to the predictability and uniformity of the result, and to the ease in the
       determination and application of the law to be applied. Id.
¶ 48       In this case, the location of the subject matter is the location of the risk insured by the
       Zurich policies. See Emerson Electric, 319 Ill. App. 3d at 232-33. Those risks are located at
       the various fax machines that gave rise to Pennswood’s liability. As alleged in the class
       action complaint, these sites are nationwide. Because the Zurich policies provided coverage
       for sites located in more than one state, little weight is given the location of the subject
       matter. See Restatement (Second) of Conflict of Laws § 193 cmt. b, at 611-12 (1971) (“The

                                                   - 13 -
       location of the insured risk [is] given greater weight than any other single contact ***
       provided that the risk can be located, at least principally, in a single state. Situations where
       this cannot be done, and where the location of the risk has less significance, include ***
       where the policy covers a group of risks that are scattered throughout two or more states.”);
       see also Emerson Electric, 319 Ill. App. 3d at 232-33.
¶ 49       Regarding the second factor, the parties agree that the place of delivery of the insurance
       policies was Pennsylvania. Thus, this factor weighs in favor of Pennsylvania’s interests.
¶ 50       Regarding the third factor, the domicile of the insured or of the insurer, the parties agree
       that the domicile of the insurers, Maryland Casualty and Assurance, is Illinois. However, in
       cases such as this one, where the risk is located in multiple states, courts focus on the
       domicile of the insured and where the negotiations, purchase, and issuance of the insurance
       policies took place. See, e.g., Emerson Electric, 319 Ill. App. 3d at 235-36. In this case,
       Pennswood is domiciled in Pennsylvania. Pennsylvania is the place of its incorporation and
       its principal place of business. Apart from Pennswood’s unsolicited faxing activities, it has
       no business operations outside of Pennsylvania. Pennswood’s employees and facilities are all
       located in Pennsylvania. The Zurich policies were negotiated with, purchased by, and issued
       to Pennswood in Pennsylvania through an agent located in Pennsylvania. Thus, the third
       factor weighs heavily in favor of Pennsylvania’s interests.
¶ 51       Regarding the fourth factor, the place of the last act giving rise to the policies is the state
       where the policies were delivered and where the premiums were paid. Id. at 233-35. The
       policies were delivered in Pennsylvania and Pennswood paid its premiums in Pennsylvania.
       Thus, this factor weighs in favor of Pennsylvania’s interests.
¶ 52       The fifth factor, the place of performance, also weighs in favor of Pennsylvania because
       there is no express agreement determining the place of performance, and Pennswood’s
       principal place of business is in Pennsylvania. See id. at 234 (where there was no express
       agreement as to the place of performance, and the intended place of the insurer’s payment of
       claims could not be determined because they were scattered throughout several states, the
       court looked to the state where the insured was located).
¶ 53       As the trial court concluded in its well-reasoned choice-of-law analysis in its September
       9, 2011, summary judgment, we conclude that the record points to Pennsylvania as the
       appropriate choice of law to govern the interpretation of the Zurich policies. Guided by
       Pennsylvania case law on the interpretation of “accident” and by federal law predicting
       Pennsylvania law regarding “property damage” insurance coverage for violations of the
       TCPA, we determine that, under Pennsylvania law, the underlying complaint did not allege
       an accident. Therefore, Zurich had no duty to defend under the policies’ “property damage”
       provisions. Because Zurich had no duty to defend, it has no duty to indemnify. See Kvaerner,
       908 A.2d at 896 n.7 (an insurer has a duty to indemnify only if it has a duty to defend).
       Further, because we have determined that Pennsylvania law and not Illinois law governs, we
       need not address Zurich’s final argument, that there is no coverage because Illinois’s public
       policy precludes coverage for fax-blasting lawsuits.
¶ 54       Thus, under our authority pursuant to Illinois Supreme Court Rule 366(a)(5) (eff. Feb. 1,
       1994), we grant summary judgment in favor of Zurich and against Pennswood and G.M. Sign
       and declare: (1) Zurich had no duty to defend Pennswood under the policies for the
       underlying complaint; (2) Zurich had no duty to defend and has no duty to indemnify
       Pennswood with respect to any liability, judgment, or settlement resulting from the

                                                   - 14 -
       underlying complaint; and (3) Zurich did not breach any contractual obligations to
       Pennswood. In addition, we dismiss G.M. Sign’s claim against Zurich alleging statutory bad
       faith under Pennsylvania law.
¶ 55       Addressing Pennswood and G.M. Sign’s cross-appeal, because we have determined that
       Zurich has no duty to Pennswood regarding any liability, judgment, or settlement in the
       underlying lawsuit, we affirm the trial court’s denial of Pennswood and G.M. Sign’s request
       for accrued postsettlement interest. Further, we need not address Zurich’s motion to strike a
       portion of Pennswood and G.M. Sign’s cross-reply brief addressing the trial court’s denial of
       their request for accrued postsettlement interest.

¶ 56                                       III. CONCLUSION
¶ 57      For the reasons stated, we reverse the trial court’s summary judgment in favor of
       Pennswood and G.M. Sign. We enter summary judgment in favor of Zurich and against
       Pennswood and G.M. Sign. Further, we affirm the trial court’s order denying Pennswood and
       G.M. Sign’s request for accrued postsettlement interest and dismiss G.M. Sign’s claim
       against Zurich alleging statutory bad faith under Pennsylvania law.

¶ 58      Reversed in part and affirmed in part; judgment entered.




                                                - 15 -
