Opinion ID: 3001938
Heading Depth: 1
Heading Rank: 2

Heading: Ill Comp. Stat. 5/445.

Text: The choice-of-law determination is especially important in this case because the substantive law in Indiana and Illinois differs on the point of law at the heart of the underlying lawsuits against the magazine-sale corpora- 4 Nos. 06-4019 & 07-1400 tions: whether negligent hiring can constitute an “occurrence” under an insurance policy. Under Indiana law, allegations of negligent hiring do not trigger an insurer’s duties to defend and indemnify the insured if the policy defines “occurrence” as an accidental event. See Am. Painting Co., 678 N.E.2d at 846. But under Illinois law, negligent hiring can constitute an “occurrence” under insurance policies that define the term as an accidental event. See Am. Family Mut. Ins. Co. v. Enright, 781 N.E.2d 394, 398-400 (Ill. App. Ct. 2002). Nautilus named as defendants in its declaratory action ACS, the numerous small corporations that submitted claims to Nautilus for defense and indemnification, and the individual plaintiffs who had filed lawsuits against ACS and the small corporations, including David Reuter, individually and as a representative of the Estate of Shirley Reuter, and Justin Chretien. Shirley Reuter, David Reuter’s mother, was murdered by a door-to-door salesman in her New Jersey home, and Justin Chretien was assaulted by a salesman in Virginia. In their respective lawsuits, David Reuter sued ACS and the small corporations Phoenix Imagery and G.O. Innovators; Chretien sued ACS and the small corporation Unified Stars. The parties engaged in extensive discovery, which included document production, interrogatories, depositions, and declarations. The gathered evidence—which will be discussed more thoroughly below as it relates to the choice-of-law analysis—showed that the states of Illinois and Indiana both have contacts with the insurance contracts. Following cross-motions for summary judgment, the district court granted summary judgment in favor of Nos. 06-4019 & 07-1400 5 Nautilus. It concluded that Indiana law applied to the insurance policies and consequently, that Nautilus had no duty to defend or indemnify ACS or the small corporations in the civil lawsuits. The district court observed that ACS is an Indiana corporation with its principal place of business in Indiana. It labeled all of the small corporations “Shell Corporations” of ACS, and found that each had an Indiana registered agent. The court also relied on the fact that ACS procured the insurance policies for the small corporations from its base in Michigan City, Indiana. On these facts, the district court decided: “All of that is enough to get this court to the substantive law of Indiana with regard to the key question about the contents of the insurance contract here.”