## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Cin cinnati

Insu rance Co. v. Chapm an , 2012 IL App (1st) 111792

Appellate Court Caption THE CI NCI NNAT I I NSURANCE COMPANY, Plaintiff-Appellee
, v. ARNOLD C HAP MAN and C.T. PHOENIX OF I NDIANA, I

NC., Def endants-A

ppellants.

District & N o. First District, Second D ivision Docke t No. 1-11-1792

Filed J une 29, 2012

Held ( Note : Thi s syl lab us

con s ti tut es no par t of the opi nio n of the cour t but has bee n pre

par ed by th e Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) Substi tution of judge as a matter of rig ht should not be re fused prior to any substantive ruling in the case m ere ly beca use t he judge informs the attorney s of his own prior ruling s on the issue prese nted.

Dec ision Under Review Appea l from the Circuit Court of Cook County
, No. 10-CH-10888; the Hon. Peter F ly

nn, J udg e, pre siding.

J udg ment Certified que stion answere d.Counsel on

Appea l Ander son & Wanca, of Rolli ng Meadow s (B rian J

. Wanca and David M. Oppenhe im, of counsel), f or appe llant Arnold Chapman.

Boc k & Hatch, L L C, of Chicag o (Philli p A. Boc k
, o f counsel), for appellant C.T. Phoenix of I ndiana, Inc.

Cray Huber Horstman Heil & VanAusdal L L C
, of Chicag o (James K. Horstman, of c ounsel), for appellee

.

Panel J USTI CE HARRI S delivered the judgme nt of the cour t, with opinion.
J ustices C u nningha

m and Connors concur

red in the judgme nt and opinion.

OP INION

¶ 1 In Marc h of 2010, plaintiff, the Cincinnati Insuranc e Company (CI C), filed a complaint for decla ratory relief ag ainst defe ndants, C.T. Phoenix of Indiana, Inc. (Phoenix ), and Arnold Chapman, seeking a judgme nt decla ring that CI C was not obligated to defe nd and indemnify Pho en i x in its underlying lawsuit with Chapman. Chapman had previously filed the underlying suit ag ainst Phoenix alleg ing P h o enix violated the Telephone Consumer Protection Act of 1991 ( TCPA) (47 U.S.C. § 227 (2006)) a nd the I llinois Consumer Fr aud and Dec eptive Business Practice s Act (8 1 5 I L CS 505/2 (West 2008)), and committed

common law conver sion. CI C, which had is s ued a commerc ial g ener al liability policy to Phoenix
, denied Phoenix ’s demand to defe nd and indemnify it based on a TCPA exclusion clause in the policy

. CI C and Chapman participated in two status hearings in the case at bar. At the second status hear ing, t h e circ uit court judge mentioned to the parties that he had

rec ently ruled on a simil ar issue in another pending case which involved Chapman’s counsel. In the other pending action, t h e circ uit court judge ruled ag ainst the party that Chapman’s counsel repr esente d. The day afte r the second status hea ri n g, C hapman filed a motion for substitut ion of

judge as a matter of rig ht pursuant to section 2-1001(a )(2) of the I llinois Code of Civil Procedur e (Code). 735 I L CS 5/2-1001(a) (2) (West 2010). The circ uit court cer tified the followingquestion pursuant to I llinois Supreme Court Rule 308 (e ff. F eb. 26, 2010):
“Case A and Case B involve differ ent parties but share a common substantive issue. Def endants’ counsel in Case B also repr esents parties in Case A. Both case s are pending befor e the same judge

. The judge decide s the common issue in Cas e A in a manner direc tly adver se to the Case B defe ndants’ position. So far, howe ver, there has been no ruling in Case B. The Case B defe ndants then move for a 735 I L C S 5 / 2 -1 001(a) (2) substitut ion of judg e as a

matter of r ight. I s the judg e re quired to g rant the motion? ”

-2-¶ 2 J URI SDI CTI ON

¶ 3 The circ uit court cer tified the question now befor e this court on J une 14, 2011. Chapman filed a petition f

or leave to a

ppeal on J une 27, 2011, which this court g rante d on Aug ust 1, 2011. Acc ording ly
, this court has jurisdiction pursuant to Rule 308 g overning cer tified questions. I ll. S. C t. R. 308 (eff. F eb. 26, 2010).

¶ 4 BA CKGROUND ¶ 5 On Marc h 17, 2010, CI C filed its complaint for decla ratory relief ag ainst Chapman and Phoenix

. In its complaint, CI C alleg ed that it issued a commerc ial g ener al liability policy to Phoenix

. In August of 2008, Chapman filed the underly i n g suit ag ainst Phoenix
, alleg ing Phoenix had telefaxed an advertisement to Chapman i n violation o f t h e T C P A (47 U.S.C. § 227) and t h e I l l i n ois Consumer Fr aud and Dec eptive Business Practice s Act (815 I L CS 505/2 (West 2008)). Chapman also alleg ed common law conver sion. P hoenix made a demand to CI C tha

t it defe nd and indemnify it in the under lying suit under the commerc ial
g ener al liability policy

. CI C denied cover ag e based on an exclusion in it s policy with Phoenix

. In August of 2009, Chapman and Phoenix settled. In October of 2009, Chapman,

as a judgme nt cre ditor, issued a third-par ty citation to discover assets to CI C. CI C asked that

a decla ratory judgme nt be enter ed decla ring that CI C was not obligated to provide cover ag e for the unde rlying suit or a ny judgme nt that had bee n enter ed ag ainst Phoenix

. ¶ 6 A case manag ement hearing, which would have been the parties’ first appea ranc e bef ore the circ uit court, was set for September 10, 2010. Howeve r, Chapman and CI C prese nted an ag ree d motion to rese t the case manag ement hear ing date to September 21, 2010. I n the
ag ree d motion, Chapman and CI C stated that both defe ndants had acc epted service
, but had
not filed an answe r. The motion fur ther stated Chapman planned to f ile an answe r, but that “[CI C] has been advised that [P hoenix] plans to defa ult and not appea

r or answe r.” On August 16, 2010, the circ uit court g rante d the ag ree d motion and enter ed an order rese tting the ca se mana g ement hea ringdate f

or September

21, 2010. ¶ 7 On September 21, 2010, the circ uit court enter ed an order setting the matter for a status hear ing on D ece mber 7, 2010. ¶ 8 On Dec ember 7, 2010, another status hear ing was held. We note that the rec ord does not contain a tr anscr ipt from the Dec ember 7, 2010, hear ing. ¶ 9 On Dec ember 8, 2010, Chapman filed a motion for substitut ion of judge as a matter of rig ht pursuant to section 2-1001(a)( 2) of the C ode. 735 I L CS 5/2-1001(a) (2) (West 2010). Chapman alleg ed that all of the require ments for the substitut ion of judge as a matter of rig ht had been s atisfied. S pecif ically
, he had not previously moved or receive d a subst itution of judge in the case and that the c ircuit court ha d “not ruled on a ny issues in the case .” ¶ 10 In response , CI C argued Chapman’s motion wa s not timely filed. CI C alleg ed that the parties had appea

red b ef o re the court on two occa sions: on September 21, 2010, and De cember 7, 2010. At the September 21, 2010, hear ing, CI C alleg ed that when the court asked the parties whe ther c ross-motions for summary judgme nt would be filed, the parties responde d that they wanted to complete discovery

. Acc ording to CI C’s response , Chapman’s counsel at the September 21, 2010, hear ing also “re fer ence d” a ruling by another circ uit court

-3-judge in a simil ar case

. CI C alleg ed the follow i n g o cc u rr ed at the September 21, 2010,

hear ing: “Counsel for [C hapman] ref ere nced a re ce n t rul ing by J udg e Agran ( Acuity Ins. v. Blackhawk Paving
, No. 08 CH 35830) which held that a simil ar TCPA ex clusion was inapplicable to the common law conver sion count included in the TCPA complaint, and
argued that since a simil ar common law conver sion count was included in the underlying complaint ag ainst Phoenix
, that [C I C] was obliga ted to aff ord cover ag e for the judgme nt ag ainst Phoenix .”
A status hear ing was set for Dec ember 7, 2010. At the Dec ember 7, 2010, status hear ing, the
court ag ain inquired whether the parties wer e prepa red to file cr o s s-motions for summary judgme nt; the parties ag ain indicated that they would like to complete outstanding discovery

. CI C a lleg ed that the following exchang e occur red at the Dec ember 7, 2010, status he aring : “In response to a st atement b y [C I C] ’s counsel that his motion would rely upon an exclusion for TCPA ty

pe conduct, th[ e] Court made a statement to the eff ect that ‘[b] efor e y ou file that m o t i o n, y ou should take a look at a case that I just decide d
reg arding a TCPA exclusion.’ When [C I C’s] counsel asked the Court for the name of the

case , the Court e x plained that he couldn’t reme mber the name of the case , but said that he would ‘bet $5.00’ that [ Chapman’s c ounsel] had argued the c ase a nd would be able
to provide [C I C] with a copy

. The Cour t p rom ised to find a copy of the decision and provide it to both sides if [C hapman’ s counsel] could not identify the case

. The hear ing ended w ith the Court setting a ne w status date of Marc h 15, 2011.”
CI C argued further in its response that Chapman “had at least two opportunities to ‘test the
water s’ with” the circ uit court and that he only moved for su b s t i tution of judge when he knew the c ourt would reje ct his argument. ¶ 11 The re cord doe s not contain a re ply brief on Cha

pman’s beha lf. ¶ 12 On J anuar

y 10, 20 1 1
, t h e ci rc u i t co u rt h el d a hearing on Chapman’s motion for substitut ion of

judge

. At the hearing, Chapman argued his motion should be g rante d beca use the court had not y et made a substantial ruling
, and he was not seeking to avoid or delay trial. As further support, he cited the leg al principle that substitut ion of judge motions should be liberally g rante d. CI C ag ree d with Chapman that the court had not y et made a substantive ruling
, but asser

ted that “a motion for substitut ion of judge may be denied if the movant had

an opportunity to test the water s and form an opinion as to the judge ’s rea ction to her claim.” CI C argued that Chapman did not move for substitut ion of judge until af ter he had lea

rned about t he judge’ s ruling on a si milar matter, Indi ana I ns. Co. v. Vehicle Alignme nt, Br ake & T ires, Inc., No. 09 CH22676 (Cir. Ct. Cook Co.) (here inafter
, VehicleAlignment ). ¶ 13 In making its ruling
, the court anticipated a “wave” of simil ar case s in the future. I t the n voiced its conce rn t hat “if I am [ substitut ed] beca

use of my ruling in Vehicle Alignment in this case , it would seem probable that I will be [subs tituted] beca use of my ruling in Vehicle Alignment
, in ever

y case .” The court commented that “mea ns that for a s i z ab l e number of i n suranc e decla

ratory judgme nt actions, I will eff ectively cea se to be part of the ch an ce ry division.” The court stated that this would “under cut the random assig nment of case s in the chanc ery di v i s i o n

. ” T he circ uit court judge also rec alled how he broug ht up his ruling in

-4-VehicleAlignment to the parties at the Dec ember 7, 2010, status hear ing, sta ting: “My rec ollection is that I avoided say ing any thing about how I thought the [ Vehicle Alignment ] ruling might impact on this case. And I should ha ve beca use I have no idea how the [ Vehicle Alignment ] ruling might impact o n t h i s case

. I t may turn out to be completely beside the point. I t just happens to be a ruling on a TCPA insurance exclusion clause . And the fa cts that underla y the [ VehicleAlignment ] case, [Chapman’s counse l] will reca ll, were unusual. Istress that they wer e unusual whe n Iruled in that ca se.” The c ourt denied Chapma n’s motion, finding:
“I do not have any hesitation in concludin g t h at this is a situation in which the [subs tituti on of judge ] motion arises out of the movant ’s p er ception of the judge ’s position in this case as opposed to t h e j u d ge’ s g ener al dispositi on or g ener al bag g ag e. And beca use of that, I can deny this motion without at all stretching the boundarie s of the exis ting c ase la

w.” ¶ 14 After deny

ing the motion, the court then instructed the parties to draf t a cer tified question pursuant to Rule 308. I ll. S. C t. R. 308 (eff. F eb. 26, 2010). ¶ 15 On J une 14, 2011, the circ uit court enter ed an amende d order cer tifying a question under Supreme Court Rule 308. The circ uit court included in its order a background sect i o n , in which it explained that “this is a decla ratory judgme nt dispute conce rns a ‘TCPA’ (47 U.S.C. § 227), a/k/a ‘junk fax’ insurance policy exclusion.” Th e court stated that “we ll over 100 TCPA ‘junk fax’ class action suits” had been filed in the circ uit court of Cook County

. Most of the plaintiffs in the T C P A j u n k fax suits had been repr esente d by “a relatively small number o f l aw fi rm s .” As an example, the circ uit court stated that the two law firms that

wer e repr esenting Chapman in the case at bar had filed 62 TCPA junk fax suits on behalf of

a single plaintiff. The court char acte rized the initial class action suits as “ ‘TCPA Phase I ’ ”

case s. ¶ 16 T he circ uit court explained that “ ‘TCPA Phase I I ’ ” case s wer e insur an ce co v er age disputes and classifie d the ca se at ba r as a phase two c ase. The court then state d : “Given the Phase I situation, one can expect that a fe w l aw fi rms–including Mr. Chapman’s astute counsel–will likely be involve d in numerous Phase I I case s. Under Cook County Cir. Ct. Gene ral Orde r 1.2, § 2.1(b)( 1), all of the Phase I I decla ratory judgme nt case s will be hear d by one or another of 15 Gene ral Chance ry Section judge s. Of c ourse, judg e-shoppingis not encoura g ed.
This is a ‘TCPA Phase I I ’ case

. This Court had previously considere d cross motions for summary judgme nt in another ‘TCPA Phase I I ’ case ( Indiana Ins. Co. v. Veh i cl e Alignment, Brake & Tires, Inc.
, No. 09 CH22676), which involved issues, and a policy exclusion, very simil ar to those involved in this case

. In Vehicle Alignment
, t h i s Court ruled in f avor of the insurer. A fter that ruling
, Mr. Chapman–aw are of the ruling
, since h i s counsel here was also counsel for the underly ing plaintiff in Vehicle Alignment

moved for a

substitut ion of judg e as of rig ht in this case

. That situation is almost cer tain to repe at itself on multipl e occa sions, g iven the pattern of TCPA lit igation described a bove.”

-5-The c ircuit court then c ertified the following question for a ppellate r eview:
“Case A and Case B involve differ ent parties but share a common substantive issue. Def endant’ s counsel in Case B also repr esents parties in Case A. Both case s are pending befor e the same judge

. The judge decide s the common issue in Case A in a manner direc tly adver se to the Case B defe ndants’ position. S o far , howeve r, there has bee n no ruling in Case B. The Case B defe ndants then move for a 735 I L CS 5/ 2 -1 0 0 1 (a)(2) substitut ion of judg e as of rig ht. I s the judg e re quired to g rant the motion? ” The circ uit court then made the following finding s reg arding its cer tified question pursuant to Rule 308 (I ll. S. Ct. R. 308 (ef f. Fe b. 26, 2010)): that it is a question of law; a substantial
g round ex ists for the differ ence o f opinion; and appellate review “may materia lly advanc e the ultimate termination of this liti g ation.” ¶ 17 On J un e 2 7
, 2 0 1 1
, C h apman filed his petition for leave to appea l, which this court
g rante d on August 1, 2011. This appeal followe d.

¶ 18 ANALYSI S ¶ 19 Be fore this co u rt , C h ap m an ar gu es the circ uit court err ed in denying his motion for substitut ion of judge beca use the circ uit court had y et to make a substanti v e ru l ing in the

case

. Chapman maintains that his counsel’s k nowledg e of an adver se ruling that a judge made in another case involving his counsel is not a proper ground for deny ing his motion. He claims that a “par

ty ’s choice of counsel is materia lly impacted b y t h at at torney ’s prior experience in other case s befor e a particula r judge
, and the attorney will be forc ed to disclose that his rete ntion will undermine the potential client’s otherwise absolute rig ht unde r [s ection 2-1001 of the Code ].” ¶ 20 In response , CI C maintains that the circ uit court proper ly denied Chapman’s motion for substitut ion of judge beca use Chapman waited to move t o substitut e judge s until afte r the judge had alre ady advised the parties of his ruling in a simil ar case , which CI C believes was

an indication of how the judge would rule in the case at bar. CI C also argues that Chapman’s

m o t i o n was late as i t was filed eig ht months afte r t he case beg an. C I C maintains that b o t h sides wer e disqualified from seeking a substitut ion of judge as a matter of rig ht pursuant to section 2-1001(a )(2) of the Code (735 I L CS 5/2-1001(a) (2) (West 2010)) afte r the Dec ember 7, 2010, hear ing be cause , based on the judge ’s comments reg arding the VehicleAlignment

case , both sides then h ad ac t u al knowledg e of how the judge was inclined to rule on the TCPA cover ag e exclusion at issu e i n t h eir case

. CI C acknow ledg es that the g ener al rule
reg arding substitut ion of a judge as a matter of rig ht is that it is absol ute prior to any substantive ruling s. Howeve r, CI C argues that an exception to the g ener al rule applies in this

case , which is that a party cannot move to substitute a judge as a matter of rig ht after it ha s had the oppor

tunity to test the judge ’s opinion as to the issue. ¶ 21 A cer

tified question broug ht under Rule 308 is a question of law and, t h er ef o re , our revie w i s de novo

. Fosse v. Pensabene , 362 I ll. App. 3d 172, 177 (2005). W e are ty pically limit ed to answe ring only the cer tified question prese nted as opposed to deter mining whether the un d er l y i n g o rder is proper

. Id. Howeve r, we may look at the rec ord of the trial court proce eding s and beyond the limit s of the cer tified question to addre ss whether the underlying

-6-order is appropr iate in order to rea ch an equitable result in the interest of judicial economy

.

Id. ¶ 22 Section 2-1001(a )(2) of the Code provides for the substitution of a judge as a matter of rig ht. 735 I L CS 5/2-1001(a) (2) (West 2010). Section 2-1001(a )(2) provides, in rele vant part: “Substitut ion of a judg e. (a) A substitut ion of judge in any civil action may be had in the following situations:

*** (2) Substitut ion as of right

. When a party timely ex er ci s es his or her rig ht to a substitut ion without cause a s provided in this paragraph ( 2). (i) Ea ch party shall be entitled to one substitut ion of judg e without cause as a matter of rig ht. (ii) An application fo r substitut ion of judge as of rig ht shall be made by motion and shall be gra

nted i f i t is prese nted before trial o r h ea ri n g beg ins and befor e the judge to whom it is prese nted has ruled on any substantial issue in the

case , or if it is presente d by consent of the parties. (iii) I f any party has not enter ed an a ppear ance in the case and has not been found in de fault, ruling s in the case by the judge on any substantial issue befor e the party ’s appea

ranc e shall not be g rou n d s fo r deny ing an otherwise timely application for substitut ion of judge as a ri gh t b y the party .” 735 I L CS 5/2- 1001(a) (2) ( West 2010). ¶ 23 Under section 2-1001(a)( 2) of the C ode, a litigant is allowed one substitut ion of j u d g e without cause as of rig ht. 735 I L CS 5/2-1001(a) (2) (West 2010). The rig ht to substitut ion of judge is absolute when proper ly made, and t h e ci rcuit court has no discretion to deny the motion. In re Marriage of Abma
, 308 I ll. App. 3d 605, 609-10 (1999). “Howe ver, to prohibit litigants fr o m ‘j u d ge shopping’ and seeking a substitut ion only afte r they have formed an opinion that the judge may be unfavor ably disposed toward the merits of their case , a motion for substitut ion of judge as of rig ht must be filed at t h e ea rl i est prac tical moment befor e

commence ment of trial or hear ing and befor e the trial judge consi d er i n g t h e motion rules
upon a subst antial i ssue in the ca se.” In re Estate of Hoellen
, 367 I ll. App. 3d 240, 245-46 (2 0 0 6) (citing In re Estate of Gay
, 353 I ll. App. 3d 341, 343 (2004))

. A motion for substitut ion of judge may also be proper ly denied, even if the judge presiding did not rule on

a substantial issue, if the litigant “had an opportunity to test the water s and form an opinion

as t o t h e court’s dispositi on” of an issue. In re Estate of Hoellen
, 367 I ll. App. 3d at 246. “The statute’s provisions are to be liberally construed in order to eff ect rathe r than defe at the rig ht of substitut ion.” Beahringer v. Hardee ’s Food Systems, Inc.
, 282 I ll. App. 3d 600, 601 (1996); see also Sahoury v. M oses , 308 I ll. App. 3d 413, 414 (1999). ¶ 24 As we have stated, ty pically our revie w of a cer tified question is limit ed to the ce rtified question prese nted. Fosse
, 362 I ll. App. 3d at 177. Howeve r, in this case , if we wer e confine d
to answe ring only the cer tified question as prese n t ed
, it would be impossibl e for us to provide a definitive answe r as there is no indication as to how the counsel in Case B lear ned of the ruling in Case A. W i t h out looking at the underly ing rec ord, the most appropr iate

-7-answe r would have to be “may b e” d u e t o the i nadequate wording of the certified question
prese nted. Acc ording ly
, to achie ve an equitable result and in the interest of judicial economy , we will not confine our revie w to the limit s of the cer tified question in this case

. Id. Due to the failing s of the cer

tified question prese nted, we will revie w the rec ord of the trial court proce eding s to address whe ther the unde rlying or der is appr opriate. Id. ¶ 25 In this case , u p o n o u r re v i ew o f t h e re co rd, we hold that Chapman’s motion for substitut ion of

judge as a matter of rig ht pursuant to section 2-1001(a )(2) of the Code should have been g rante d. 735 I L CS 5/2-1001(a) (2) (W es t 2 0 10). I t is undisputed that the circ uit
court had not y et ruled on a substantial issue. The only issue is whether either attorney was able to “test the water s and form an opinion as to the court’s dispositi on toward his claim.” In re Hoellen
, 367 I ll. App. 3d at 246. Neither attorney in this case did so. Rather, it was the circ uit c ourt judge himself who voluntarily broug ht his prior ruling, which was dispositi ve of the issue prese nted, to both co u n s el s’ attention. Under these fac ts, we cannot allow the circ uit court’s actio n s to undermine the purpose of section 2-1001(a )(2) of the Code in providing a litigant a substitut ion of judge as of rig ht. See Beahringer
, 282 I ll. App. 3d at 601 (“The s tatute’s provisions are to be li bera lly construed in order to eff ect rather than defe at the rig ht of substitut ion.”). We find it contra ry to the statute for the circ uit court judge to sua sponte inform the attorney s as to his ruling s in past matters and having that event interpre ted

as a testing of the water s by the attorney s. Her e neither attorney tested the water s. Rather, the circ uit court judge imposed upon the at t o rney s the information as to his past ruling s. This was improper . Acc ording ly , we a nswer the cer

tified question in the positive.

¶ 26 CONCL USI ON ¶ 27 Ba sed on the fac ts prese nted to this court, we answe r the cer tified question prese nted in the positive.

¶ 28 Certified que stion answere d.

-8-