Court Opinion

ID: 3148103
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:42:02.294191+00
Date Added: 2024-06-11T12:08:12.083130
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                        Appellate Court

               Cincinnati Insurance Co. v. Chapman, 2012 IL App (1st) 111792

Appellate Court            THE CINCINNATI INSURANCE COMPANY, Plaintiff-Appellee, v.
Caption                    ARNOLD CHAPMAN and C.T. PHOENIX OF INDIANA, INC.,
                           Defendants-Appellants.

District & No.             First District, Second Division
                           Docket No. 1-11-1792

Filed                      June 29, 2012

Held                       Substitution of judge as a matter of right should not be refused prior to
(Note: This syllabus       any substantive ruling in the case merely because the judge informs the
constitutes no part of     attorneys of his own prior rulings on the issue presented.
the opinion of the court
but has been prepared
by the Reporter of
Decisions for the
convenience of the
reader.)

Decision Under             Appeal from the Circuit Court of Cook County, No. 10-CH-10888; the
Review                     Hon. Peter Flynn, Judge, presiding.

Judgment                   Certified question answered.
Counsel on                 Anderson & Wanca, of Rolling Meadows (Brian J. Wanca and David M.
Appeal                     Oppenheim, of counsel), for appellant Arnold Chapman.

                           Bock & Hatch, LLC, of Chicago (Phillip A. Bock, of counsel), for
                           appellant C.T. Phoenix of Indiana, Inc.

                           Cray Huber Horstman Heil & VanAusdal LLC, of Chicago (James K.
                           Horstman, of counsel), for appellee.

Panel                      JUSTICE HARRIS delivered the judgment of the court, with opinion.
                           Justices Cunningham and Connors concurred in the judgment and
                           opinion.

                                              OPINION

¶1          In March of 2010, plaintiff, the Cincinnati Insurance Company (CIC), filed a complaint
        for declaratory relief against defendants, C.T. Phoenix of Indiana, Inc. (Phoenix), and Arnold
        Chapman, seeking a judgment declaring that CIC was not obligated to defend and indemnify
        Phoenix in its underlying lawsuit with Chapman. Chapman had previously filed the
        underlying suit against Phoenix alleging Phoenix violated the Telephone Consumer
        Protection Act of 1991 (TCPA) (47 U.S.C. § 227 (2006)) and the Illinois Consumer Fraud
        and Deceptive Business Practices Act (815 ILCS 505/2 (West 2008)), and committed
        common law conversion. CIC, which had issued a commercial general liability policy to
        Phoenix, denied Phoenix’s demand to defend and indemnify it based on a TCPA exclusion
        clause in the policy. CIC and Chapman participated in two status hearings in the case at bar.
        At the second status hearing, the circuit court judge mentioned to the parties that he had
        recently ruled on a similar issue in another pending case which involved Chapman’s counsel.
        In the other pending action, the circuit court judge ruled against the party that Chapman’s
        counsel represented. The day after the second status hearing, Chapman filed a motion for
        substitution of judge as a matter of right pursuant to section 2-1001(a)(2) of the Illinois Code
        of Civil Procedure (Code). 735 ILCS 5/2-1001(a)(2) (West 2010). The circuit court certified
        the following question pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010):
                “Case A and Case B involve different parties but share a common substantive issue.
            Defendants’ counsel in Case B also represents parties in Case A. Both cases are pending
            before the same judge. The judge decides the common issue in Case A in a manner
            directly adverse to the Case B defendants’ position. So far, however, there has been no
            ruling in Case B. The Case B defendants then move for a 735 ILCS 5/2-1001(a)(2)
            substitution of judge as a matter of right. Is the judge required to grant the motion?”

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¶2                                         JURISDICTION
¶3         The circuit court certified the question now before this court on June 14, 2011. Chapman
       filed a petition for leave to appeal on June 27, 2011, which this court granted on August 1,
       2011. Accordingly, this court has jurisdiction pursuant to Rule 308 governing certified
       questions. Ill. S. Ct. R. 308 (eff. Feb. 26, 2010).

¶4                                        BACKGROUND
¶5         On March 17, 2010, CIC filed its complaint for declaratory relief against Chapman and
       Phoenix. In its complaint, CIC alleged that it issued a commercial general liability policy to
       Phoenix. In August of 2008, Chapman filed the underlying suit against Phoenix, alleging
       Phoenix had telefaxed an advertisement to Chapman in violation of the TCPA (47 U.S.C.
       § 227) and the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS
       505/2 (West 2008)). Chapman also alleged common law conversion. Phoenix made a
       demand to CIC that it defend and indemnify it in the underlying suit under the commercial
       general liability policy. CIC denied coverage based on an exclusion in its policy with
       Phoenix. In August of 2009, Chapman and Phoenix settled. In October of 2009, Chapman,
       as a judgment creditor, issued a third-party citation to discover assets to CIC. CIC asked that
       a declaratory judgment be entered declaring that CIC was not obligated to provide coverage
       for the underlying suit or any judgment that had been entered against Phoenix.
¶6         A case management hearing, which would have been the parties’ first appearance before
       the circuit court, was set for September 10, 2010. However, Chapman and CIC presented an
       agreed motion to reset the case management hearing date to September 21, 2010. In the
       agreed motion, Chapman and CIC stated that both defendants had accepted service, but had
       not filed an answer. The motion further stated Chapman planned to file an answer, but that
       “[CIC] has been advised that [Phoenix] plans to default and not appear or answer.” On
       August 16, 2010, the circuit court granted the agreed motion and entered an order resetting
       the case management hearing date for September 21, 2010.
¶7         On September 21, 2010, the circuit court entered an order setting the matter for a status
       hearing on December 7, 2010.
¶8         On December 7, 2010, another status hearing was held. We note that the record does not
       contain a transcript from the December 7, 2010, hearing.
¶9         On December 8, 2010, Chapman filed a motion for substitution of judge as a matter of
       right pursuant to section 2-1001(a)(2) of the Code. 735 ILCS 5/2-1001(a)(2) (West 2010).
       Chapman alleged that all of the requirements for the substitution of judge as a matter of right
       had been satisfied. Specifically, he had not previously moved or received a substitution of
       judge in the case and that the circuit court had “not ruled on any issues in the case.”
¶ 10       In response, CIC argued Chapman’s motion was not timely filed. CIC alleged that the
       parties had appeared before the court on two occasions: on September 21, 2010, and
       December 7, 2010. At the September 21, 2010, hearing, CIC alleged that when the court
       asked the parties whether cross-motions for summary judgment would be filed, the parties
       responded that they wanted to complete discovery. According to CIC’s response, Chapman’s
       counsel at the September 21, 2010, hearing also “referenced” a ruling by another circuit court

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       judge in a similar case. CIC alleged the following occurred at the September 21, 2010,
       hearing:
               “Counsel for [Chapman] referenced a recent ruling by Judge Agran (Acuity Ins. v.
           Blackhawk Paving, No. 08 CH 35830) which held that a similar TCPA exclusion was
           inapplicable to the common law conversion count included in the TCPA complaint, and
           argued that since a similar common law conversion count was included in the underlying
           complaint against Phoenix, that [CIC] was obligated to afford coverage for the judgment
           against Phoenix.”
       A status hearing was set for December 7, 2010. At the December 7, 2010, status hearing, the
       court again inquired whether the parties were prepared to file cross-motions for summary
       judgment; the parties again indicated that they would like to complete outstanding discovery.
       CIC alleged that the following exchange occurred at the December 7, 2010, status hearing:
               “In response to a statement by [CIC]’s counsel that his motion would rely upon an
           exclusion for TCPA type conduct, th[e] Court made a statement to the effect that
           ‘[b]efore you file that motion, you should take a look at a case that I just decided
           regarding a TCPA exclusion.’ When [CIC’s] counsel asked the Court for the name of the
           case, the Court explained that he couldn’t remember the name of the case, but said that
           he would ‘bet $5.00’ that [Chapman’s counsel] had argued the case and would be able
           to provide [CIC] with a copy. The Court promised to find a copy of the decision and
           provide it to both sides if [Chapman’s counsel] could not identify the case. The hearing
           ended with the Court setting a new status date of March 15, 2011.”
       CIC argued further in its response that Chapman “had at least two opportunities to ‘test the
       waters’ with” the circuit court and that he only moved for substitution of judge when he
       knew the court would reject his argument.
¶ 11       The record does not contain a reply brief on Chapman’s behalf.
¶ 12       On January 10, 2011, the circuit court held a hearing on Chapman’s motion for
       substitution of judge. At the hearing, Chapman argued his motion should be granted because
       the court had not yet made a substantial ruling, and he was not seeking to avoid or delay trial.
       As further support, he cited the legal principle that substitution of judge motions should be
       liberally granted. CIC agreed with Chapman that the court had not yet made a substantive
       ruling, but asserted that “a motion for substitution of judge may be denied if the movant had
       an opportunity to test the waters and form an opinion as to the judge’s reaction to her claim.”
       CIC argued that Chapman did not move for substitution of judge until after he had learned
       about the judge’s ruling on a similar matter, Indiana Ins. Co. v. Vehicle Alignment, Brake
       & Tires, Inc., No. 09 CH22676 (Cir. Ct. Cook Co.) (hereinafter, Vehicle Alignment).
¶ 13       In making its ruling, the court anticipated a “wave” of similar cases in the future. It then
       voiced its concern that “if I am [substituted] because of my ruling in Vehicle Alignment in
       this case, it would seem probable that I will be [substituted] because of my ruling in Vehicle
       Alignment, in every case.” The court commented that “means that for a sizable number of
       insurance declaratory judgment actions, I will effectively cease to be part of the chancery
       division.” The court stated that this would “undercut the random assignment of cases in the
       chancery division.” The circuit court judge also recalled how he brought up his ruling in

                                                 -4-
       Vehicle Alignment to the parties at the December 7, 2010, status hearing, stating:
               “My recollection is that I avoided saying anything about how I thought the [Vehicle
           Alignment] ruling might impact on this case. And I should have because I have no idea
           how the [Vehicle Alignment] ruling might impact on this case. It may turn out to be
           completely beside the point. It just happens to be a ruling on a TCPA insurance exclusion
           clause. And the facts that underlay the [Vehicle Alignment] case, [Chapman’s counsel]
           will recall, were unusual. I stress that they were unusual when I ruled in that case.”
       The court denied Chapman’s motion, finding:
               “I do not have any hesitation in concluding that this is a situation in which the
           [substitution of judge] motion arises out of the movant’s perception of the judge’s
           position in this case as opposed to the judge’s general disposition or general baggage.
           And because of that, I can deny this motion without at all stretching the boundaries of the
           existing case law.”
¶ 14       After denying the motion, the court then instructed the parties to draft a certified question
       pursuant to Rule 308. Ill. S. Ct. R. 308 (eff. Feb. 26, 2010).
¶ 15       On June 14, 2011, the circuit court entered an amended order certifying a question under
       Supreme Court Rule 308. The circuit court included in its order a background section, in
       which it explained that “this is a declaratory judgment dispute concerns a ‘TCPA’ (47 U.S.C.
       § 227), a/k/a ‘junk fax’ insurance policy exclusion.” The court stated that “well over 100
       TCPA ‘junk fax’ class action suits” had been filed in the circuit court of Cook County. Most
       of the plaintiffs in the TCPA junk fax suits had been represented by “a relatively small
       number of law firms.” As an example, the circuit court stated that the two law firms that
       were representing Chapman in the case at bar had filed 62 TCPA junk fax suits on behalf of
       a single plaintiff. The court characterized the initial class action suits as “ ‘TCPA Phase I’ ”
       cases.
¶ 16       The circuit court explained that “ ‘TCPA Phase II’ ” cases were insurance coverage
       disputes and classified the case at bar as a phase two case. The court then stated :
               “Given the Phase I situation, one can expect that a few law firms–including Mr.
           Chapman’s astute counsel–will likely be involved in numerous Phase II cases. Under
           Cook County Cir. Ct. General Order 1.2, § 2.1(b)(1), all of the Phase II declaratory
           judgment cases will be heard by one or another of 15 General Chancery Section judges.
           Of course, judge-shopping is not encouraged.
               This is a ‘TCPA Phase II’ case. This Court had previously considered cross motions
           for summary judgment in another ‘TCPA Phase II’ case (Indiana Ins. Co. v. Vehicle
           Alignment, Brake & Tires, Inc., No. 09 CH22676), which involved issues, and a policy
           exclusion, very similar to those involved in this case. In Vehicle Alignment, this Court
           ruled in favor of the insurer. After that ruling, Mr. Chapman–aware of the ruling, since
           his counsel here was also counsel for the underlying plaintiff in Vehicle Alignment-
           moved for a substitution of judge as of right in this case.
               That situation is almost certain to repeat itself on multiple occasions, given the
           pattern of TCPA litigation described above.”

                                                 -5-
       The circuit court then certified the following question for appellate review:
               “Case A and Case B involve different parties but share a common substantive issue.
           Defendant’s counsel in Case B also represents parties in Case A. Both cases are pending
           before the same judge. The judge decides the common issue in Case A in a manner
           directly adverse to the Case B defendants’ position. So far, however, there has been no
           ruling in Case B. The Case B defendants then move for a 735 ILCS 5/2-1001(a)(2)
           substitution of judge as of right. Is the judge required to grant the motion?”
       The circuit court then made the following findings regarding its certified question pursuant
       to Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 26, 2010)): that it is a question of law; a substantial
       ground exists for the difference of opinion; and appellate review “may materially advance
       the ultimate termination of this litigation.”
¶ 17       On June 27, 2011, Chapman filed his petition for leave to appeal, which this court
       granted on August 1, 2011. This appeal followed.

¶ 18                                         ANALYSIS
¶ 19       Before this court, Chapman argues the circuit court erred in denying his motion for
       substitution of judge because the circuit court had yet to make a substantive ruling in the
       case. Chapman maintains that his counsel’s knowledge of an adverse ruling that a judge
       made in another case involving his counsel is not a proper ground for denying his motion.
       He claims that a “party’s choice of counsel is materially impacted by that attorney’s prior
       experience in other cases before a particular judge, and the attorney will be forced to disclose
       that his retention will undermine the potential client’s otherwise absolute right under [section
       2-1001 of the Code].”
¶ 20       In response, CIC maintains that the circuit court properly denied Chapman’s motion for
       substitution of judge because Chapman waited to move to substitute judges until after the
       judge had already advised the parties of his ruling in a similar case, which CIC believes was
       an indication of how the judge would rule in the case at bar. CIC also argues that Chapman’s
       motion was late as it was filed eight months after the case began. CIC maintains that both
       sides were disqualified from seeking a substitution of judge as a matter of right pursuant to
       section 2-1001(a)(2) of the Code (735 ILCS 5/2-1001(a)(2) (West 2010)) after the December
       7, 2010, hearing because, based on the judge’s comments regarding the Vehicle Alignment
       case, both sides then had actual knowledge of how the judge was inclined to rule on the
       TCPA coverage exclusion at issue in their case. CIC acknowledges that the general rule
       regarding substitution of a judge as a matter of right is that it is absolute prior to any
       substantive rulings. However, CIC argues that an exception to the general rule applies in this
       case, which is that a party cannot move to substitute a judge as a matter of right after it has
       had the opportunity to test the judge’s opinion as to the issue.
¶ 21       A certified question brought under Rule 308 is a question of law and, therefore, our
       review is de novo. Fosse v. Pensabene, 362 Ill. App. 3d 172, 177 (2005). We are typically
       limited to answering only the certified question presented as opposed to determining whether
       the underlying order is proper. Id. However, we may look at the record of the trial court
       proceedings and beyond the limits of the certified question to address whether the underlying

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       order is appropriate in order to reach 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
       right. 735 ILCS 5/2-1001(a)(2) (West 2010). Section 2-1001(a)(2) provides, in relevant part:
            “Substitution of a judge.
               (a) A substitution of judge in any civil action may be had in the following situations:
                    ***
                    (2) Substitution as of right. When a party timely exercises his or her right to a
               substitution without cause as provided in this paragraph (2).
                        (i) Each party shall be entitled to one substitution of judge without cause as
                    a matter of right.
                        (ii) An application for substitution of judge as of right shall be made by
                    motion and shall be granted if it is presented before trial or hearing begins and
                    before the judge to whom it is presented has ruled on any substantial issue in the
                    case, or if it is presented by consent of the parties.
                        (iii) If any party has not entered an appearance in the case and has not been
                    found in default, rulings in the case by the judge on any substantial issue before
                    the party’s appearance shall not be grounds for denying an otherwise timely
                    application for substitution of judge as a right by the party.” 735 ILCS 5/2-
                    1001(a)(2) (West 2010).
¶ 23        Under section 2-1001(a)(2) of the Code, a litigant is allowed one substitution of judge
       without cause as of right. 735 ILCS 5/2-1001(a)(2) (West 2010). The right to substitution of
       judge is absolute when properly made, and the circuit court has no discretion to deny the
       motion. In re Marriage of Abma, 308 Ill. App. 3d 605, 609-10 (1999). “However, to prohibit
       litigants from ‘judge shopping’ and seeking a substitution only after they have formed an
       opinion that the judge may be unfavorably disposed toward the merits of their case, a motion
       for substitution of judge as of right must be filed at the earliest practical moment before
       commencement of trial or hearing and before the trial judge considering the motion rules
       upon a substantial issue in the case.” In re Estate of Hoellen, 367 Ill. App. 3d 240, 245-46
       (2006) (citing In re Estate of Gay, 353 Ill. App. 3d 341, 343 (2004)). A motion for
       substitution of judge may also be properly denied, even if the judge presiding did not rule on
       a substantial issue, if the litigant “had an opportunity to test the waters and form an opinion
       as to the court’s disposition” of an issue. In re Estate of Hoellen, 367 Ill. App. 3d at 246.
       “The statute’s provisions are to be liberally construed in order to effect rather than defeat the
       right of substitution.” Beahringer v. Hardee’s Food Systems, Inc., 282 Ill. App. 3d 600, 601
       (1996); see also Sahoury v. Moses, 308 Ill. App. 3d 413, 414 (1999).
¶ 24        As we have stated, typically our review of a certified question is limited to the certified
       question presented. Fosse, 362 Ill. App. 3d at 177. However, in this case, if we were confined
       to answering only the certified question as presented, it would be impossible for us to
       provide a definitive answer as there is no indication as to how the counsel in Case B learned
       of the ruling in Case A. Without looking at the underlying record, the most appropriate

                                                 -7-
       answer would have to be “maybe” due to the inadequate wording of the certified question
       presented. Accordingly, to achieve an equitable result and in the interest of judicial economy,
       we will not confine our review to the limits of the certified question in this case. Id. Due to
       the failings of the certified question presented, we will review the record of the trial court
       proceedings to address whether the underlying order is appropriate. Id.
¶ 25       In this case, upon our review of the record, we hold that Chapman’s motion for
       substitution of judge as a matter of right pursuant to section 2-1001(a)(2) of the Code should
       have been granted. 735 ILCS 5/2-1001(a)(2) (West 2010). It is undisputed that the circuit
       court had not yet ruled on a substantial issue. The only issue is whether either attorney was
       able to “test the waters and form an opinion as to the court’s disposition toward his claim.”
       In re Hoellen, 367 Ill. App. 3d at 246. Neither attorney in this case did so. Rather, it was the
       circuit court judge himself who voluntarily brought his prior ruling, which was dispositive
       of the issue presented, to both counsels’ attention. Under these facts, we cannot allow the
       circuit court’s actions to undermine the purpose of section 2-1001(a)(2) of the Code in
       providing a litigant a substitution of judge as of right. See Beahringer, 282 Ill. App. 3d at 601
       (“The statute’s provisions are to be liberally construed in order to effect rather than defeat
       the right of substitution.”). We find it contrary to the statute for the circuit court judge to sua
       sponte inform the attorneys as to his rulings in past matters and having that event interpreted
       as a testing of the waters by the attorneys. Here neither attorney tested the waters. Rather, the
       circuit court judge imposed upon the attorneys the information as to his past rulings. This
       was improper. Accordingly, we answer the certified question in the positive.

¶ 26                                     CONCLUSION
¶ 27       Based on the facts presented to this court, we answer the certified question presented in
       the positive.

¶ 28       Certified question answered.

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