Pace Communications Services Corp. v. Express Products, Inc.
408 Ill. App. 3d 970
Ill. App. Ct.2011Background
- Pace Communications and Tunica Pharmacy seek to collect a class judgment from Express Products' insurers, Cumberland Mutual, under a nationwide policy territory that includes the United States.
- Cumberland issued sequential annual liability policies to Express from April 26, 2001 to April 26, 2003, with a general aggregate limit of $2 million and a per-occurrence limit of $1 million.
- Plaintiffs obtained an Illinois judgment against Express for $7,999,999.96 on October 13, 2009, notice that recovery would be from insurance proceeds, and caused a citation to discover assets to be issued to Cumberland.
- Cumberland moved to dismiss the citation, asserting lack of Illinois personal jurisdiction and improper service, and arguing other suits were pending elsewhere.
- The Lake County circuit court denied the motion, finding Illinois personal jurisdiction based on a nationwide-territory-of-coverage clause and proper service under the Insurance Code, and granted leave to issue a third citation; Cumberland appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Illinois may exercise specific personal jurisdiction over Cumberland | Pace argues Cumberland purposefully availed by nationwide coverage; minimum contacts exist. | Cumberland contends no Illinois contacts and subjecting it to Illinois jurisdiction is improper under due process. | Yes; Illinois may exercise specific jurisdiction. |
| Whether Cumberland was properly served under the Insurance Code | Service complied with §123 and subsequent direct service further validated the process. | Initial service issues remain, and service must align with §123; third citation timing questioned. | Ruling on service is moot; later direct service renders the issue unnecessary to resolve. |
Key Cases Cited
- Bevins v. Comet Casualty Co., 71 Ill.App.3d 758 (Ill. App. 1979) (nationwide coverage can support jurisdiction when consistent with due process)
- Rossman v. State Farm Mutual Automobile Insurance Co., 832 F.2d 282 (4th Cir. 1987) (nationwide-coverage clause supports minimum contacts)
- OMI Holdings, Inc. v. Royal Insurance Co. of Canada, 149 F.3d 1086 (10th Cir. 1998) (rejected broad use of nationwide clause; emphasized fairness and other factors)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (minimum contacts and reasonableness; purposeful availment analyzed)
- Payne v. Motorists' Mutual Insurance Co., 4 F.3d 452 (6th Cir. 1993) (nationwide coverage constitutes purposeful availment of forum)
- Farmers Insurance Exchange v. Portage La Prairie Mutual Insurance Co., 907 F.2d 911 (9th Cir. 1990) (nationwide coverage supports jurisdiction where insured event occurred)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (foreseeability alone not sufficient for personal jurisdiction)
- OMI Holdings, Inc. v. Royal Insurance Co. of Canada, 149 F.3d 1086 (10th Cir. 1998) (reiterated importance of fair play and substantial justice in jurisdiction)
- Th Agriculture & Nutrition, LLC v. Ace European Group Ltd., 488 F.3d 1282 (10th Cir. 2007) (recognizes nuanced view on minimum contacts from coverage clauses)