Citizens Ins. Co. of America v. Wynndalco Enterprises, LLC

Dist. Ct. did not err in granting defendant-insured’s motion for summary judgment in plaintiff-insurance company’s action, seeking declaration that it had no obligation to defend defendant in underlying class actions, alleging that defendant violated Illinois Biometric Information Privacy Act (BIPA) by selling rights to class members’ facial images that had been collected and scanned into database by third party. Plaintiff asserted that provision contained in its business-owner’s insurance policy that excluded claims arising out of statutes that prohibited or limited dissemination of material or information precluded coverage for claims in underlying class actions alleging violations of BIPA, and thus it had no duty to defend same. While Ct. of Appeals agreed that underlying lawsuits fell within broad language of exclusion, it also agreed with Dist. Ct. that language in exclusion was ambiguous, where it also appeared to exclude coverage for claims that other provisions of policy covered. As such. Dist. Ct. could properly construe instant ambiguity in favor of defendant-insured so as to require defendant to defend defendant in underlying class actions. Ct. of Appeals also rejected defendant’s proposal to give narrowed construction of exclusion so as to resolve any ambiguity, where language of exclusion would not support said proposed construction.