Tri City Foods Inc. v. Commerce & Industry Insurance Company, 1:24-cv-00414

Background

Tri City Foods, Inc. (TCF) sued its umbrella liability insurer, Commerce & Industry Insurance Company (C&I), seeking a declaration that C&I owes a duty to defend TCF in a class action under Illinois’ Biometric Information Privacy Act (BIPA).
The underlying lawsuit (the Young Lawsuit) alleges TCF collected and stored employees’ fingerprints via third-party vendor NCR, without proper disclosure or consent, violating BIPA.
TCF previously sought coverage for the Young Lawsuit from its employment practices and commercial general liability (CGL) insurers (National Union and Travelers); coverage was denied by Travelers, while National Union provided a defense under a reservation of rights.
Two C&I umbrella policies are at issue (2015–2016 and 2016–2017). TCF conceded no coverage is available under the 2016–2017 policy due to a binding appellate decision, narrowing the dispute to the 2015–2016 policy.
The parties filed cross-motions for summary judgment on whether C&I has a duty to defend and/or indemnify under the 2015–2016 policy, with C&I raising several policy exclusions and exhaustion of underlying/other insurance.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does underlying suit allege covered “personal injury and advertising injury” (including publication)?	The complaint at least potentially alleges improper disclosure to third parties (e.g., NCR), meeting the policy’s “publication” requirement.	The BIPA claims asserted do not allege “publication” or covered injury, and thus fall outside the policy’s grant of coverage.	Coverage potentially triggered because the complaint could be read to allege publication/disclosure; duty to defend is possible.
Do the policy’s Violation of Laws and Employment Practices Exclusions bar coverage?	Both exclusions are inapplicable or ambiguous and must be construed in TCF’s favor; BIPA is not the kind of statute targeted by the Violation of Laws exclusion.	Exclusions are unambiguous and apply to BIPA claims, barring coverage.	Neither exclusion clearly applies; ambiguities resolve in TCF’s favor, so coverage is not definitively barred.
Has the duty to defend been triggered, given other available insurance?	Yes—underlying CGL and EPL policies do not cover (or have denied coverage for) the Young Lawsuit.	No—primary insurance and "Other Insurance" (EPL) have not been exhausted; C&I’s obligations are purely excess.	Duty to defend exists, but only after exhaustion of Other Insurance (National Union’s EPL policy).
Is C&I estopped from asserting defenses to indemnity obligations or breach of the duty to defend?	C&I waived or is estopped from defenses due to its conduct.	C&I’s duty hasn’t been triggered; claim is premature.	No estoppel; C&I hasn’t breached a duty to defend, so estoppel and indemnity are not ripe/premature.

Key Cases Cited

Citizens Ins. Co. of Am. v. Wynndalco Enters., LLC, 70 F.4th 987 (7th Cir. 2023) (Illinois insurance policy interpretation principles)
Sanders v. Ill. Union Ins. Co., 2019 IL 124565 (policy interpretation basics under Illinois law)
W. Bend Mut. Ins. Co. v. Krishna Schaumburg Tan, Inc., 2021 IL 125978 (limitations on application of insurance exclusions to BIPA claims)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard)
Employers Ins. v. Ehlco Liquidating Tr., 186 Ill. 2d 127 (Illinois estoppel doctrine for insurance defense)