May 2023

Henson v. Merob Logistics, LLC

Leslie M. HENSON, Individually, and as Personal Representative of the Estate of Leslie S. Henson, Respondent,

MEROB LOGISTICS, LLC, and Tedros S. Lakew, Respondents,

and

Zurich American Insurance Company, Appellant.

WD 85158

OPINION FILED: April 18, 2023

Appeal from the Circuit Court of Jackson County, Missouri, The Honorable John M. Torrence, Judge

Attorneys and Law Firms

Tim Dollar and Tom Hershewe, Kansas City, MO, Attorneys for Respondent Leslie Henson.

Julie J. Gibson and Michael D. Matteuzzi, Overland Park, KS, Attorneys for Respondents Merob Logistics, LLC, and Tedros Lakew.

Russell F. Watters, Timothy J. Wolf, and Lucas J. Ude, St. Louis, MO, Attorneys for Appellant.

Before Division Two: Edward R. Ardini, Jr., Presiding Judge, and Lisa White Hardwick and Karen King Mitchell, Judges

Opinion

Karen King Mitchell, Judge

*1 Zurich American Insurance Company appeals the denial of its motions to intervene and vacate the judgment in a wrongful death action filed by Leslie M. Henson against Merob Logistics, LLC, and Tedros Lakew. Zurich raises nine points on appeal. In Points I-IV, Zurich argues that the denial of its motion to intervene violated Rule 52.12(a) in that § 537.065 provides a right to insurers to intervene (Point I) and Zurich had an interest in the litigation (Point II); Rule 52.12(b) insofar as there were common questions of law and fact or § 537.065 granted a conditional right to intervene (Point III); and Zurich’s right to due process in that it was not given an opportunity to be heard on the underlying judgment for which it is now subject to garnishment (Point IV). In Points V-IX, Zurich argues that the trial court erred in denying Zurich’s motion to modify or vacate the arbitration award for a variety of reasons. Finding no error, we affirm.

Background

On December 6, 2019, Lakew was operating a tractor–trailer as part of his employment with Merob when he drove the tractor–trailer onto the right shoulder of a highway in Chase County, Kansas, and lost control of the vehicle. Henson v. Merob Logistics, LLC, 633 S.W.3d 838, 840 (Mo. App. W.D. 2021). The trailer, which had no lights, came to rest blocking the roadway. Id. Around 11:48 p.m., Leslie S. Henson (Decedent) struck the trailer while driving a passenger vehicle and died from his injuries six days later. Id.

At the time of the accident, both Lakew and Merob were insured by American Millennium Insurance Company (American) for the tractor portion of the tractor–trailer. Id. The trailer portion was owned by an affiliate of Amazon.com, Inc., and insured by Zurich through a commercial automobile insurance policy. Id.

On January 21, 2020, Decedent’s son, Leslie M. Henson, was appointed Administrator of Decedent’s estate. After the accident, American agreed to pay out its policy limits ($1,000,000) to Henson. Believing that Lakew and/or Merob may be insured under additional policies, Henson entered a non-execution agreement with Lakew and Merob, whereby Henson agreed that, in exchange for the policy limits paid by American, Henson would not levy execution against any personal assets of either Lakew or Merob other than liability insurance coverage available to either by any insurers other than American or any proceeds Lakew or Merob might recover from claims against insurers for failure to defend or settle claims against Lakew or Merob. Henson would file a wrongful death action against Lakew and Merob in Missouri, and Lakew and Merob agreed not to challenge either venue or personal jurisdiction, though they were otherwise free to answer with both admissions and denials as they saw fit. The agreement further provided for a distribution of the assets from the American policy to Decedent’s children, and all parties agreed to file a joint motion with the court to approve the agreement and distribution.

The agreement also provided, “If investigation or discovery reveals additional potential insurance, Lakew and Merob and their personal counsel agree to tender their defense to that insurance company.” And, if any additional insurer then rejected a request for an unconditional defense, “Lakew and Merob agree[d] to reject any defense under reservation and resolve Henson, Jr.’s claims through binding arbitration under the provisions of the Missouri Uniform Arbitration Act and the Federal Arbitration Act.” The agreement also noted that Henson, Lakew, and Merob had negotiated “a separate arbitration agreement that they agree[d] to execute if any additional insurance companies reject[ed] Lakew’s and/or Merob’s request for an unconditional defense of the claims.”

*2 Then, on April 13, 2020, Henson filed a wrongful death lawsuit against Lakew and Merob. On May 28, 2020, pursuant to a joint motion from the parties, the trial court approved the non-execution agreement and distribution of assets from the American policy. On June 23, 2020, counsel for Lakew and Merob sent a letter to Zurich and three other insurers, notifying them of the accident and the non-execution agreement and tendering the defense of Lakew and Merob to each insurer. The letter gave the insurers fourteen days from receipt of the letter to respond with an indication of whether they would provide a defense. Zurich received the letter on June 30, 2020, and, on July 6, 2020, Zurich sent Merob a letter acknowledging the claim had been filed but giving no indication as to whether Zurich intended to provide a defense.

On August 13, 2020, the previously negotiated arbitration agreement between Henson, Lakew, and Merob, wherein the parties agreed to submit their dispute to binding arbitration, was executed. On August 28, 2020, Lakew and Merob sent a second letter to Zurich, noting that, because Zurich did not respond to the prior communication with an agreement to defend, Lakew and Merob entered into binding arbitration. The letter further advised Zurich that the arbitration was scheduled for September 3, 2020, and that Zurich was invited to participate. Zurich chose not to attend, and, after the hearing, the arbitrator entered an award, finding Lakew negligent and 90% at fault, Merob vicariously liable for Lakew’s negligence, and Decedent contributorily negligent and 10% at fault. The arbitrator awarded total damages to Henson in the amount of $11,071,647.82.

On September 18, 2020, Henson filed an unopposed motion to confirm the arbitration award. And, on September 23, 2020, Zurich filed its first motion to intervene. The very next day, the trial court entered an order confirming the arbitration award, which was followed a day later by Zurich’s second motion to intervene and request to vacate the judgment. The trial court attempted to schedule case management conferences to address Zurich’s motions, but Zurich filed an appeal in this court, challenging the judgment confirming the arbitration award. Henson, 633 S.W.3d at 842. On October 5, 2021, we dismissed the appeal for lack of a final judgment insofar as the motions to intervene had not been addressed, and we held that Zurich was not then an aggrieved party. Id. at 843.

On November 29, 2021, Zurich filed a supplemental motion on intervention, which the trial court denied on January 27, 2022. Zurich appeals.

Analysis

Zurich raises nine points on appeal. The first four are directed at the trial court’s denial of Zurich’s motion to intervene, and the remaining five are directed at the trial court’s denial of Zurich’s motion to modify or vacate the arbitration award.

I. Zurich lacked a right to intervene.

In Points I and II, Zurich claims that it had a right to intervene under Rule 52.12(a). We disagree. “We will affirm the trial court’s decision denying intervention as a matter of right ‘unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.’ ” Britt v. Otto, 577 S.W.3d 133, 139 (Mo. App. W.D. 2019) (quoting Allen v. Bryers, 512 S.W.3d 17, 28 (Mo. banc 2016)). “[T]he decision to grant or deny the motion is one involving application of the law.” Id. at 139-40 (quoting BMO Harris Bank v. Hawes Tr. Invs., LLC, 492 S.W.3d 607, 615 (Mo. App. W.D. 2016)).

Rule 52.12(a) provides two circumstances under which anyone who has timely applied “shall be permitted to intervene in an action”:

(1) when a statute of this state confers an unconditional right to intervene or (2) when the applicant claims an interest relating to the property or transaction that is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

*3 Rule 52.12(a).¹

The relevant version of § 537.065.2, provides:

Before a judgment may be entered against any tort-feasor after such tort-feasor has entered into a contract under this section, the insurer or insurers shall be provided with written notice of the execution of the contract and shall have thirty days after receipt of such notice to intervene as a matter of right in any pending lawsuit involving the claim for damages.

Section 537.065.2 RSMo 2017.²

In Point I, Zurich argues that § 537.065.2 conferred upon it, as an insurer, an unconditional right to intervene in Henson’s action below. Though § 537.065.2 does provide an insurer the right to intervene “in any pending lawsuit involving the claim for damages” within thirty days of receiving notice of an agreement entered into under § 537.065.1, the trial court below determined that § 537.065 did not apply to the agreement at issue in this matter. Specifically, the trial court determined, “Zurich has failed to establish that Missouri statutory law applied to the parties’ nonexecution agreement. The Court finds that the requirements of section 537.065 do not apply to the agreement between an Oklahoma resident and two Texas residents regarding a vehicle crash that occurred in Kansas.” Zurich has not challenged that determination on appeal.³

*4 “Before a judgment may be reversed, an appellant must demonstrate that ‘all of the reasons’ the trial court relied on as supporting a challenged ruling in the judgment ‘were wrong.’ ” In re Wilma G. James Tr., 487 S.W.3d 37, 53 (Mo. App. S.D. 2016) (quoting City of Peculiar v. Hunt Martin Materials, LLC, 274 S.W.3d 588, 591 (Mo. App. W.D. 2009)). “Thus, the failure to challenge an alternative basis supporting the trial court’s ruling ‘is fatal to [the] appeal.’ ” Id. (quoting STRCUE, Inc. v. Potts, 386 S.W.3d 214, 219 (Mo. App. W.D. 2012)). Because Zurich did not challenge the trial court’s determination that § 537.065 was inapplicable, Zurich cannot now rely on § 537.065 to support its claim that the court erred in denying its request to intervene as a matter of right under Rule 52.12(a)(1). Point I is denied.

In Point II, Zurich claims that it also had a right to intervene under Rule 52.12(a)(2) insofar as it had an interest in the underlying litigation, disposition of the litigation impaired its ability to protect that interest, and none of the existing parties adequately represented Zurich’s interest. See Rule 52.12(a)(2) (identifying three requirements to intervene as a matter of right). As the proposed intervenor, Zurich bore the burden of proving all three assertions. See Britt, 577 S.W.3d at 142. If Zurich established all three requirements, its “right to intervene [wa]s absolute, and a trial court ha[d] no discretion to deny the motion.” Id. But if any one of the requirements was not established, the trial court did not abuse its discretion in denying the motion to intervene. Id.

“Missouri courts have long held that ‘[t]he liability of an insurer as potential indemnitor of the judgment does not constitute a direct interest in such a judgment so as to implicate intervention as of right in that action.’ ” Id. (quoting Sherman v. Kaplan, 522 S.W.3d 318, 326 (Mo. App. W.D. 2017)). “Instead, ‘the insurer has a forum by declaratory judgment action or in the action to compel indemnity for the judgment that affords the insurer full scope to protect its interests against the contention of coverage, and hence liability for the judgment.’ ” Id. (quoting Sherman, 522 S.W.3d at 326). “In other words, ‘[i]n the third[-]party liability claim context, the insurance carrier has no right to intervene in litigation between its policyholder and the third party; the carrier can participate in the litigation only pursuant to its contractual obligation to defend the policyholder.’ ” Id. (quoting Sherman, 522 S.W.3d at 326).⁴ Because Zurich’s interest is limited to its contractual obligation as a potential indemnitor, it failed to prove the requisite interest for intervention as a matter of right under Rule 52.12(a)(2).⁵ Point II is denied.

II. The trial court did not err in denying Zurich permissive intervention.

*5 In Point III, Zurich argues that the court erred in denying permissive intervention under Rule 52.12(b)(1) and (2). “We review the denial of permissive intervention under Rule 52.12(b) for abuse of discretion.” Britt, 577 S.W.3d at 145. “A trial court abuses its discretion when its decision is ‘clearly against the logic of the circumstances then before the court and is so arbitrary and unreasonable as to shock the sense of justice and indicate a lack of careful consideration.’ ” Id. (quoting Johnson v. State, 366 S.W.3d 11, 21 (Mo. banc 2012)).

Rule 52.12(b) allows for permissive intervention, upon timely application, “(1) when a statute of this state confers a conditional right to intervene; or (2) when an applicant’s claim or defense and the main action have a question of law or fact in common.” Rule 52.12(b). Zurich argues first that its objection to the arbitration award had common questions of law and fact with Henson’s wrongful death petition and, alternatively, that § 537.065.2 provided Zurich with a conditional right to intervene. For the same reasons identified in response to Point I, supra, we reject Zurich’s alternative argument that § 537.065.2 provided it with a conditional right to intervene. Because Zurich did not challenge the trial court’s determination that § 537.065 was inapplicable, Zurich cannot now rely on § 537.065 to support its claim that the court erred in denying its request for permissive intervention under Rule 52.12(b).

With respect to Zurich’s argument that its objection to the arbitration award had common questions of both law and fact with Henson’s wrongful death petition and it was, therefore, entitled to permissive intervention, we disagree.

“[I]t is well established that ‘an intervenor must accept the action pending as he finds it at the time of intervention.’ ” Knight ex rel. Knight v. Knight, 609 S.W.3d 813, 824 (Mo. App. W.D. 2020) (quoting Martin v. Busch, 360 S.W.3d 854, 858 n.5 (Mo. App. E.D. 2011)). At the time Zurich sought intervention, the parties had already participated in a binding arbitration, and an award had already been entered; the parties were merely seeking confirmation of that award by the trial court. Thus, we do not ask whether Zurich’s objection to the arbitration award had common questions of law and fact with Henson’s petition; instead, we ask whether there were common questions with the motion requesting confirmation of the arbitration award, which was the “main action” pending at the time Zurich sought to intervene. There were not.

In its motion to intervene, Zurich argued that the arbitration award was “erroneous, collusive, invalid, and unenforceable,” and further argued that it “was procured by undue means.”⁶ But the parties, themselves, jointly urged the court to confirm the award and none of the parties raised any challenge to the validity or enforceability of the award; thus, there were no common questions of law or fact between Zurich’s request to intervene and the parties’ joint motion to confirm the arbitration award. See Aguilar v. GEICO Cas. Co., 588 S.W.3d 195, 201-02 (Mo. App. W.D. 2019) (“Because the circuit court here was asked to confirm the award, and no grounds were urged by the parties to the arbitration for vacating, modifying, or correcting the award, neither the validity nor the enforceability of the award was at issue.”). Under § 435.400,⁷ the court was required to confirm the award, unless a party raised grounds urging the court to vacate, modify, or correct the award. Hart v. Metzger, 834 S.W.2d 236, 238 (Mo. App. E.D. 1992). “And because no application was filed [by a party] to vacate the award for undue fraud, questions of law and fact pertaining to the circumstances under which the parties entered the agreement were similarly not at issue.” Aguilar, 588 S.W.3d at 202.⁸

*6 In Point IV, Zurich argues that it suffered a due process violation based on its alleged inability to be heard on the judgment for which it will be garnished. For the same reasons discussed in footnote 6 in response to Point III, we reject Point IV. Zurich plainly has the opportunity—and has capitalized on this opportunity—to be heard in both its declaratory judgment action currently pending in federal court and in the garnishment action filed by Henson below. Thus, there is no due process violation. For all of these reasons, Point III and IV are denied.

III. Zurich lacked standing to request the trial court modify or vacate the arbitration award.

In Points V-IX, Zurich raises a variety of rationales to support its claim that the trial court erred in denying Zurich’s post-judgment request to modify or vacate the arbitration award. But “[o]nly a party has standing to attempt to set aside or appeal from a judgment.” F.W. Disposal S., LLC v. St. Louis Cnty. Council, 266 S.W.3d 334, 338 (Mo. App. E.D. 2008). “In order to be a party, a person ‘must either be named as a party in the original pleadings, or be later added as a party by appropriate trial court orders.’ ” Id. (quoting Wieners v. Doe, 165 S.W.3d 520, 522 (Mo. App. S.D. 2005)). “Motions filed after judgment by strangers to the record present nothing for the court to rule on.” Id.

Here, because the trial court denied Zurich’s request to intervene, Zurich remained a stranger to the action and, therefore, lacked standing to seek modification or vacation of the arbitration award. Accordingly, the trial court did not err in denying Zurich’s motion.

Points V-IX are denied.

Conclusion

The trial court did not err in denying Zurich’s request to intervene. And, because Zurich was not a party, Zurich lacked standing to seek modification or vacation of the arbitration award; thus, the trial court did not err in denying Zurich’s post-judgment motion to modify or vacate the award. The trial court’s judgment is affirmed.

Edward R. Ardini, Jr., Presiding Judge, and Lisa White Hardwick, Judge, concur.

All Citations

— S.W.3d —-, 2023 WL 2981556

Footnotes

All rule references are to the Missouri Supreme Court Rules (2021) unless otherwise noted.
Zurich argues that we should apply the 2021 version of § 537.065, which provides greater rights for insurers under the agreements permitted therein, rather than the 2017 version. We disagree. Even if § 537.065 applies to the agreement in this case, the applicable version would be the one effective when the contract was executed because the 2021 version contains additional requirements not found in the 2017 version; thus, the parties could not enter into a contract “under this section” that included requirements that did not yet exist. See Desai v. Seneca Specialty Ins. Co., 581 S.W.3d 596, 601 (Mo. banc 2019) (holding that, where “contracts executed under the amended statute have new requirements to be effective compared with those executed under the [prior] statute[,] … the amended statute is not a continuation of the prior version pursuant to section 1.120,” and the parties “could not have ‘entered into a contract’ pursuant to [new] requirement[s] that w[ere] not yet law.”).
In fact, the sole reference Zurich makes is an isolated, conclusory statement in the argument portion of the brief that “Section 537.065.2 … undoubtedly applies to the non-execution agreement entered into by the parties,” followed by a citation to a nonexistent provision of the applicable version of § 537.065. Though the applicable version of § 537.065 also indicates that it “shall apply to any covenant not to execute or any contract to limit recovery to specified assets, regardless of whether it is referred to as a contract under this section,” § 537.065.3, it says nothing about whether § 537.065 applies to agreements between non-Missouri residents involving a crash occurring outside of Missouri. And, because Zurich has not raised a claim on appeal related to the applicability of § 537.065 under these circumstances, we need not decide whether the trial court’s conclusion was correct.
“If either party to the insurance contract breaches in such a way that results in the insurer not providing a defense to the insured during the underlying lawsuit, that matter may be raised only in the proper forum, i.e., a declaratory judgment action or a subsequent garnishment action.” Britt v. Otto, 577 S.W.3d 133, 142 (Mo. App. W.D. 2019) (quoting Sherman v. Kaplan, 522 S.W.3d 318, 326 (Mo. App. W.D. 2017)).
Zurich argues for the first time on appeal that, by giving insurers a right to intervene in § 537.065, the legislature necessarily intended to completely abrogate this well-settled law about the insurer’s lack of direct interest in the action even when the entity attempting intervention does not comply with § 537.065. We need not reach this issue, as Zurich failed to preserve it by failing to raise it below. In any event, Zurich’s argument seems at odds with the decisions in Loveland v. Austin, 626 S.W.3d 716 (Mo. App. E.D. 2021), transfer denied (Aug. 31, 2021); Aguilar v. GEICO Cas. Co., 588 S.W.3d 195 (Mo. App. W.D. 2019); and Britt, 577 S.W.3d at 143; and with the general principle that, “[u]nless a statute clearly abrogates the common law either expressly or by necessary implication, the common law rule remains valid.” State ex rel. Brown v. III Invs., Inc., 80 S.W.3d 855, 860 (Mo. App. W.D. 2002) (quoting In re Estate of Parker, 25 S.W.3d 611, 614 (Mo. App. W.D. 2000)).
The underlying bases for Zurich’s claim that the award is erroneous is that the award fails to comply with statutory damage caps under Kansas law, fails to credit the $1,000,000 paid out by American against the total award, improperly awards pre-crash and pre-death damages, and “improperly implicates Defendants’ alleged coverage with Zurich.” Zurich argues that the award was collusive because it was a product of the underlying non-execution agreement that Zurich contends was collusive. But “[t]he validity and/or enforceability of the [non-execution] contract is not an issue in [an] appeal” from the denial of requested intervention. Britt, 577 S.W.3d at 140 n.6. Furthermore, “[t]he authorized grounds for vacating an [arbitration] award are limited, and do not include re-litigating the facts or legal issues determined by the award.” Id. at 144. In any event, intervention “is not available to … litigate the coverage question in the [underlying] action, or to restore to [the insurer] the control of the defense it forfeited by the denial of coverage, or to impugn the fairness of the settlement agreement proceedings and judgment.” Whitehead v. Lakeside Hosp. Ass’n, 844 S.W.2d 475, 481 (Mo. App. W.D. 1992). “These are interests of liability properly litigable in an action for declaratory judgment, statutory garnishment, or even by the insured for reimbursement.” Id.
Section 435.400 provides, “Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 435.405 and 435.410.” § 435.400.
Furthermore, Zurich was invited to attend the arbitration, but it declined to do so. And, “in denying permissive intervention, the trial court was entitled to consider that [the would-be intervenor] declined an invitation to participate in the arbitration proceeding.” Britt, 577 S.W.3d at 145-46.

End of Document

A&R Logistics, Inc. v. American Zurich Ins. Co.

A&R LOGISTICS, INC., Plaintiff-Appellant,

AMERICAN ZURICH INSURANCE COMPANY and ZURICH AMERICAN INSURANCE COMPANY, Defendants-Appellees.

No. 1-22-1256

Order filed April 26, 2023

Appeal from the Circuit Court of Cook County.

Nos. 18 CH 4410, 18 CH 4471

Honorable Sophia H. Hall and Clare J. Quish, Judges, presiding.

ORDER

JUSTICE BURKE delivered the judgment of the court.

*1 ¶ 1 Held: We affirm the circuit court’s dismissal of plaintiff’s second amended complaint with prejudice pursuant to section 2-615 of the Code of Civil Procedure because a choice-of-law analysis establishes that Illinois law applies to this case, and plaintiff only alleged claims under West Virginia law.

¶ 2 Plaintiff, A&R Logistics, Inc. (A&R), sued defendants, American Zurich Insurance Company (American) and Zurich American Insurance Company (Zurich), for claims arising out of American’s denial of coverage for a workplace injury lawsuit that one of A&R’s employes filed against A&R in West Virginia.¹ The circuit court dismissed A&R’s second amended complaint pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2014)), finding that, under a choice-of-law analysis, Illinois law applies to this case and A&R cannot prevail under Illinois law. On appeal, A&R argues that (1) West Virginia law and Illinois law would produce different outcomes in this case and West Virginia law applies, (2) the circuit court erroneously decided the section 2-615 motion to dismiss on the merits of the case rather than on the face of the complaint, (3) two counts of the complaint should not have been dismissed because they stated claims under Illinois law, and (4) the circuit court should have granted A&R leave to amend the complaint rather than dismissing it. For the following reasons, we affirm.

¶ 3 I. BACKGROUND

¶ 4 Christopher Toth was employed as a truck driver at an A&R facility in West Virginia. In 2014, he was injured while unloading his truck during a delivery in Ohio.² Toth filed a workers’ compensation claim in West Virginia, which A&R settled. He also filed a lawsuit against A&R in West Virginia state court, which was removed to the United States District Court for the Southern District of West Virginia. Toth’s lawsuit against A&R was based on the deliberate intention exception to the West Virginia Workers’ Compensation Act, which allows an employee to sue his employer, in addition to collecting workers’ compensation, if the employer acted with “deliberate intention” in causing the employee’s injury (W. Va. Code Ann. § 23-4-2(d)(2) (West 2014)). A&R settled Toth’s lawsuit and incurred at least $380,000 in defense costs and settlements between Toth’s worker’s compensation claim and his lawsuit.

¶ 5 American insured A&R under a workers’ compensation and employer liability policy (the WC policy). The WC policy states that American has a duty to defend A&R for “any claim, proceeding or suit” against A&R for benefits payable under the policy. In turn, the policy covers “bodily injury by accident” sustained by A&R’s employees, but not “[b]odily injury intentionally caused or aggravated by [A&R].” In addition, a form entitled “West Virginia Employers Liability Insurance Intentional Act Exclusion Endorsement” (the intentional act exclusion) excludes from coverage “bodily injury intentionally caused or aggravated by [A&R] or which is the result of [A&R’s] engaging in conduct equivalent to an intentional tort, however defined, including by [A&R’s] deliberate intention as that term is defined by W. Va. Code § 23-4-2(d)(2).”

*2 ¶ 6 Zurich insured A&R under a commercial general liability policy (the CGL policy). The CGL policy contains a section titled “Stop Gap Employers Liability Coverage,” which states that Zurich has a duty to defend A&R in any lawsuit seeking damages for “bodily injury by accident” sustained by A&R’s employees. The CGL policy excludes from coverage bodily injury “intentionally caused or aggravated by A&R.” The policy also states that, “[f]or injury to ‘employees’ subject to West Virginia Workers’ Compensation Laws, this exclusion applies only if the act causing or aggravating the injury is of deliberate intent as defined by SB744 paragraph (2)(ii).”

¶ 7 A&R tendered Toth’s lawsuit to defendants and requested coverage in the form of defense and indemnification. American denied coverage under the WC policy based on the intentional act exclusion, but Zurich provided coverage under the CGL policy. Zurich conceded that the intentional injury exclusion in the CGL policy had become unenforceable due to the West Virginia Supreme Court’s decision in First Mercury Insurance Co. v. Russell, 239 W. Va. 773 (2017). According to A&R, defendants took this approach because the CGL policy has a higher deductible than the WC policy, so coverage under the CGL policy is more favorable to defendants and less favorable to A&R.

¶ 8 A&R subsequently filed this lawsuit against defendants in the circuit court of Cook County. A&R’s second amended complaint, which is at issue in this appeal, alleged that West Virginia law applies to this dispute and governed both the WC policy and the CGL policy. A&R alleged that the WC policy’s intentional act exclusion had been rendered unenforceable by the West Virginia Supreme Court in Russell. Count I of the complaint sought declaratory judgment that, under the WC policy, American owed a duty to provide coverage to, defend, and indemnify A&R for Toth’s lawsuit. Count II alleged breach of contract for American’s failure to provide coverage under the WC policy. Count III alleged breach of the implied covenant of good faith and fair dealing. Count IV alleged that American violated “West Virginia insurance regulations, standards and laws.”

¶ 9 Defendants filed a section 2-615 motion to dismiss the second amended complaint. They argued that A&R failed to allege a claim for which relief could be granted because all of A&R’s claims were premised on the application of West Virginia law, but A&R had not pled any facts to support the application of West Virginia law instead of Illinois law. In response, A&R argued that West Virginia law applied because “the incident giving rise to this coverage dispute stems from an accident at A&R’s West Virginia terminal, the workers’ compensation claim at issue was governed by West Virginia law and the exclusion (wrongly) relied upon by American [ ] is specific only to West Virginia’s employer’s liability claims.”

¶ 10 The circuit court performed a choice-of-law analysis and concluded that the WC policy’s intentional act exclusion would not be unenforceable in West Virginia under Russell, and “[t]here is no dispute that the Intentional Act Exclusion is valid under Illinois law.” Therefore, the circuit court concluded, West Virginia law and Illinois law would produce the same result, Illinois law applied, and the intentional act exclusion supported American’s denial of coverage. Because American had no duty to provide coverage, the court dismissed count I, and dismissed the remaining counts as moot. The dismissal was with prejudice.

¶ 11 A&R filed a motion to reconsider, arguing that its counts for declaratory relief and breach of contract stated claims under Illinois law, so the circuit court either should not have dismissed them or should have allowed A&R to replead them. Defendants responded that A&R forfeited its argument that those counts stated claims under Illinois law because it did not make that argument in response to the motion to dismiss, and because the second amended complaint explicitly alleged that West Virginia law applied. Defendants also argued that A&R necessarily took the position that the intentional act exclusion was unenforceable under West Virginia law, but enforceable under Illinois law, because that was the only way the two states’ laws could produce different outcomes such that West Virginia law could apply to this case. The circuit court denied A&R’s motion to reconsider, finding that A&R forfeited its argument that Illinois law applied to the counts for declaratory relief and breach of contract because it raised that argument for the first time in its motion to reconsider.

*3 ¶ 12 A&R timely appealed.

¶ 13 II. ANALYSIS

¶ 14 On appeal, A&R challenges the circuit court’s rulings on four grounds. First, A&R contends that the circuit court’s choice-of-law analysis was incorrect because Illinois and West Virginia laws would lead to different outcomes, and West Virginia law should apply. Second, A&R argues that the circuit court erred by deciding defendants’ section 2-615 motion to dismiss on the merits of A&R’s claims rather than the sufficiency of the second amended complaint on its face. Third, A&R argues that its counts for declaratory relief and breach of contract should not have been dismissed because they stated claims under Illinois law. Finally, A&R contends that the circuit court should have allowed A&R to file a third amended complaint rather than dismissing this case with prejudice.

¶ 15 A. Choice-of-Law

¶ 16 The central dispute of this appeal is whether Illinois law or West Virginia law applies to A&R’s claims. Our resolution of this issue will govern the resolution of this appeal as a whole. A&R argues that the application of Illinois law would produce a different outcome than the application of West Virginia law, and that West Virginia law should control.

¶ 17 We review the circuit court’s choice-of-law determination de novo (Townsend v. Sears, Roebuck and Co., 227 Ill. 2d 147, 153 (2007)), which means that we perform the same analysis as the circuit court (Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011)). We apply Illinois’ choice-of-law rules, and the first step in Illinois’ choice-of-law analysis is to determine whether the application of different states’ laws would produce different outcomes. Townsend, 227 Ill. 2d at 155. A choice-of-law determination is only required when the party seeking that determination establishes an actual conflict between two states’ laws. Bridgeview Health Care Center, Ltd. v. State Farm Fire & Cas. Co., 2014 IL 116389, ¶ 25; see also Townsend, 227 Ill. 2d at 155 (“A choice-of-law determination is required only when a difference in law will make a difference in the outcome.”). If the outcome would be the same under the laws of either state, then Illinois law applies as the law of the forum. Chicago Board Options Exchange, Inc. v. International Securities Exchange, 2012 IL App (1st) 102228, ¶ 44.

¶ 18 1. West Virginia Law

¶ 19 The West Virginia Workers’ Compensation Act provides immunity to employers for employees’ lawsuits alleging work-related injuries. Smith v. Apex Pipeline Services, Inc., 230 W. Va. 620, 627 (2013); W. Va. Code Ann. § 23-2-6 (West 2014). However, an employer does not have immunity from suit when it acts with deliberate intention to cause the employee’s injury. Smith, 230 W. Va. at 627; W Va. Code Ann. § 23-4-2(d)(2) (West 2014). In that case, the employee may sue his employer for damages in addition to collecting workers’ compensation benefits. Smith, 230 W. Va. at 627; W. Va. Code Ann. §§ 23-4-6 and 2(c) (West 2014). To establish deliberate intention in West Virginia, an employee must prove that (1) an unsafe working condition with a high degree of risk and a strong probability of serious injury or death existed, (2) the employer had actual knowledge of the unsafe working condition, (3) the unsafe working condition violated a state or federal safety statute or commonly accepted industry standard, (4) the employer exposed the employee to the unsafe condition, and (5) the employee suffered serious compensable injury or death. Smith, 230 W. Va. at 628; W. Va. Code Ann. § 23-4-2(d)(2)(ii)(A-E) (West 2014).

*4 ¶ 20 Toth alleged a deliberate intention theory in his lawsuit against A&R, and American denied coverage under the WC policy’s intentional act exclusion. In West Virginia, “[a]n insurance company seeking to avoid liability through the operation of an exclusion has the burden of proving the facts necessary to the operation of that exclusion.” (Internal quotations and citations omitted.) State ex rel. Nationwide Mut. Ins. Co. v. Wilson, 236 W. Va. 228, 236 (2015) However, “[w]here the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended.” (Internal quotations and citations omitted.) Cherrington v. Erie Insurance Property and Casualty Co., 231 W. Va. 470, 486 (2013).

¶ 21 The language of the WC policy and the intentional act exclusion is unambiguous. The endorsement at issue is titled “Intentional Act Exclusion,” and it states that the WC policy does not cover an injury to an employee “which is the result of [A&R’s] engaging in conduct equivalent to an intentional tort, however defined, including by [A&R’s] deliberate intention as that term is defined by W. Va. Code § 23-4-2(d)(2).” That language precisely describes Toth’s lawsuit against A&R. Toth’s complaint, which is attached to A&R’s second amended complaint, alleged one count for deliberately intentional injury under section 23-4-2(d)(2). The West Virginia Supreme Court has held that an insurer can, under a workers’ compensation and employers’ liability policy, properly exclude coverage for an employee’s lawsuit alleging deliberate intention pursuant to section 23-4-2. W. Va. Employers’ Mutual Insuranc. Co. v. Summit Point Raceway Associates, 228 W. Va. 360, 371-73 (2011). So, West Virginia law would find that American’s denial of coverage under the WC policy was proper because the language of the intentional act exclusion unambiguously excludes coverage for Toth’s deliberate intent lawsuit under section 23-4-2.

¶ 22 A&R argues that American’s denial of coverage would be improper under the West Virginia Supreme Court’s decision in Russell. In that case, Jeffrey Russell, an employee of Kimes Steel, was injured in a workplace accident and sued the company, alleging that Kimes Steel acted with deliberate intention as defined in section 23-4-2. Russell, 239 W. Va. at 776. Kimes Steel was insured under a commercial general liability policy issued by First Mercury, which excluded from coverage employees’ claims of bodily injury. Id. However, the commercial general liability policy also contained an endorsement titled “Stop Gap – Employers Liability Coverage Endorsement – West Virginia,” which covered any damages that Kimes Steel was obligated to pay due to employees’ claims of bodily injury by accident. Id. at 776-78. First Mercury denied coverage for Russell’s lawsuit against Kimes Steel and the parties filed claims against each other arising out of that denial of coverage. Id. at 776. A West Virginia circuit court granted summary judgment for Kimes Steel, finding that the stop gap endorsement was ambiguous as to whether it covered Russell’s deliberate intent action, and that Kimes Steel had a reasonable expectation of coverage for Russell’s claims. Id. at 777.

¶ 23 The West Virginia Supreme Court agreed that the stop gap endorsement was ambiguous. Id. at 780. The court explained that, under West Virginia law, “stop gap” provisions are intended to provide “coverage for employers when employees are able to bring an action for injury despite workers’ compensation immunity.” Id. at 778 (citing Erie Insurance Property and Casualty Co. v. Stage Show Pizza, JTS, Inc., 210 W. Va. 63, 68 (2001)). So, the “Stop Gap” heading indicated coverage for Russell’s action alleging deliberately intentional injury, yet the body of the endorsement only provided coverage for bodily injury by accident and attempted to exclude coverage for injury caused by Kimes Steel’s deliberate intention. Id. at 778-79. This contradiction created an ambiguity that had to be construed in favor of coverage. Id. at 779. The West Virginia Supreme Court affirmed summary judgment in favor of Kimes Steel. Id. at 780.

*5 ¶ 24 A&R argues that Russell means that the WC policy’s intentional act exclusion is unenforceable in this case. However, the differences between Russell and this case are readily apparent. In Russell, the insurer denied coverage under a commercial general liability policy for the insured company’s employee’s lawsuit alleging deliberate workplace injury. In this case, Zurich accepted coverage under the CGL policy for Toth’s lawsuit alleging deliberate workplace injury. American denied coverage under the WC policy, a type of policy that was not at issue in Russell. Moreover, in Russell, the intentional injury exclusion was unenforceable because it was ambiguous when read with the stop gap endorsement as a whole. In this case, A&R does not argue that the WC policy or the intentional act exclusion are ambiguous. Unlike the stop gap endorsement in Russell, nothing in the WC policy or the intentional act exclusion suggests that American would provide coverage for a deliberately intentional injury or a lawsuit alleging one. Russell does not stand for a general principle of West Virginia law that means that the intentional act exclusion in this case is unenforceable.³ Accordingly, we find that West Virginia law would hold that American properly denied coverage under the unambiguous language of the WC policy’s intentional act exclusion.

¶ 25 2. Illinois Law

¶ 26 The Illinois Workers’ Compensation Act (820 ILCS 305/1 et seq. (West 2014)) makes workers’ compensation benefits the exclusive remedy for injuries arising out of the course of employment. Garland v. Morgan Stanley & Co., Inc., 2013 IL App (1st) 112121, ¶ 24. However, an employee can sue his employer, in addition to seeking workers’ compensation, when the employer deliberately injures the employee. Id. ¶¶ 25-29. An employee who brings an intentional tort claim against his employer must allege that the defendant acted deliberately with the specific intent to injure him. Id. ¶ 29.

¶ 27 In Illinois, a court must give the clear and unambiguous words of an insurance policy their plain, ordinary, and popular meaning. Empire Indemnity Insurance Co. v. Chicago Province of Society of Jesus, 2013 IL App (1st) 112346, ¶ 33. By contrast, if the policy’s language is susceptible to multiple reasonable interpretations, then it is ambiguous and must be strictly construed in favor of coverage. Id. However, a court must not strain to find ambiguity where none exists. Id. “ ‘To determine whether the insurer has a duty to defend the insured, the court must look to the allegations in the underlying complaint and compare these allegations to the relevant provisions of the insurance policy.’ ” Id. ¶ 34 (quoting Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 107-08 (1992)). If the underlying complaint alleges facts that fall within, or even potentially within, coverage, then the insurer must defend the insured even if the allegations are groundless, false, or fraudulent. Empire Indemnity, 2013 IL App (1st) 112346, ¶ 34. An insurer can only refuse to defend a lawsuit against the insured if it is clear from the face of the underlying complaint that the allegations fail to state facts that bring the case within, or potentially within, the policy’s coverage. Id. In determining whether the allegations in the underlying complaint meet that threshold, both the underlying complaint and the insurance policy must be liberally construed in favor of coverage. Id. ¶ 35. Phrases in the underlying complaint such as “intentionally” or “willfully” indicate intentional conduct to which an exclusionary clause for intentional conduct applies. Illinois State Bar Ass’n Mutual Insurance Co. v. Leighton Legal Group, LLC, 2018 IL App (4th) 170548, ¶ 38.

¶ 28 Toth’s underlying lawsuit alleged that A&R “deliberately formed the intention to produce the specific result of the injuries suffered by” him. (Emphasis added.) The WC policy states that it does not cover claims for “[b]odily injury intentionally caused or aggravated by [A&R].” Moreover, the intentional act exclusion states that it does not cover claims alleging an injury to an employee “which is the result of [A&R’s] engaging in conduct equivalent to an intentional tort.” (Emphasis added.). Toth’s lawsuit plainly alleged intentional misconduct by A&R that caused his injury, and both the WC policy and the intentional act exclusion unambiguously exclude such a claim from coverage. Illinois law would produce the same result as West Virginia law; namely, that American properly denied coverage under the WC policy. Because the two states’ laws would produce the same result, Illinois law applies as the law of the forum. See Chicago Board Options Exchange, 2012 IL App (1st) 102228, ¶ 44.

*6 ¶ 29 A&R argues that Illinois law and West Virginia law would produce different outcomes because there are “differences in the two states’ workers’ compensation statutory schemes.” We express no opinion on whether that is accurate. In any event, what matters is whether American’s denial of coverage would be improper under West Virginia law, yet proper under Illinois law. That is the only scenario that could produce a choice-of-law conflict that would result in West Virginia law applying to this case. However, as explained above, American’s denial of coverage would be proper under both states’ laws because the language of the WC policy and the intentional act exclusion are unambiguous. Therefore, Illinois law applies. A&R’s second amended complaint explicitly alleged that it sought relief under West Virginia law, stated no claims under Illinois law, and alleged no facts that would render the intentional act exclusion unenforceable in Illinois. Critically, A&R did not allege that the WC policy or the intentional act exclusion were unenforceable because they were ambiguous. A&R only alleged that the intentional act exclusion was unenforceable due to the West Virginia Supreme Court’s decision in Russell. Accordingly, A&R stated no claims for which relief could be granted under Illinois law, and we affirm the circuit court’s dismissal of the second amended complaint.

¶ 30 B. Dismissal Pursuant to Section 2-615

¶ 31 A&R next argues that the circuit court erred “because it decided the case on the merits, which is improper on a motion to dismiss under Section 2-615.” According to A&R, the circuit court should have instead analyzed the sufficiency of A&R’s claims on the face of the second amended complaint. The circuit court’s ruling was based on its choice-of-law analysis, which concluded that Illinois law applies to this dispute. This argument essentially presents the question of whether the circuit court properly resolved a section 2-615 motion to dismiss based on a choice-of-law analysis.

¶ 32 A section 2-615 motion to dismiss challenges the legal sufficiency of the complaint. Jane Doe-3 v. McLean County Unit District No. 5 Board of Directors, 2012 IL 112479, ¶ 15. The question is whether the facts alleged, viewed in the light most favorable to the plaintiff, and taking all well-pleaded facts and reasonable inferences as true, are sufficient to state a cause of action for which relief may be granted. Id. ¶ 16. The circuit court should only grant a section 2-615 motion to dismiss if no set of facts can be proved that would entitle the plaintiff to recovery. Id.

¶ 33 The alternative to a section 2-615 motion to dismiss is a section 2-619 motion to dismiss. A section 2-619 motion “ ‘admits the legal sufficiency of the plaintiff’s complaint but raises defects, defenses, or other affirmative matters that appear on the complaint’s face or that are established by external submissions acting to defeat the complaint’s allegations.’ ” Guarantee Trust Life Insurance Co. v. Kribbs, 2016 IL App (1st) 160672, ¶ 27 (quoting Burton v. Airborne Express, Inc., 367 Ill. App. 3d 1026, 1029 (2006)). Our review is de novo under either section 2-615 or 2-619. Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, ¶ 31.

¶ 34 Caselaw regarding whether choice-of-law issues should be resolved under section 2-615 or 2-619 is limited. Our supreme court has indicated “choice of law [is] an affirmative matter” under section 2-619. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 487 (1994) (citing Ingersoll v. Klein, 46 Ill. 2d 42 (1970)). More recently, the Fourth District concluded that choice-of-law issues “are properly considered and addressed in the context of a section 2-619 motion to dismiss, where a trial court may consider pleadings, depositions, and affidavits when making its ruling *** rather than in the context of a section 2-615 motion, where only the pleadings may be considered.” (Internal citation omitted.) Perkinson v. Courson, 2018 IL App (4th) 170364, ¶ 37. This is because the choice-of-law analysis often raises factual issues that cannot be resolved on the face of the complaint alone. Id. However, we have also affirmed a circuit court’s choice-of-law analysis concluding that Illinois law applies in the context of a section 2-615 motion. Miller v. Hayes, 233 Ill. App. 3d 847, 848 (1992).

¶ 35 Defendants’ motion to dismiss and the circuit court’s order granting it cited only section 2-615. That approach was proper. See id. The second amended complaint alleged sufficient facts to address the choice-of-law issue. A&R’s alleged that Toth was a West Virginia resident employed in West Virginia, that he was injured in Ohio, and that both his workers’ compensation claim and his lawsuit against A&R were filed and settled in West Virginia. It also alleged that A&R is an Illinois corporation with its principal place of business in Kentucky, that American is an Illinois corporation with its principal place of business in Illinois, and that Zurich is a New York corporation with its principal place of business in Illinois. Defendants do not appear to dispute any of these allegations. While choice-of-law issues sometimes raise factual questions that must be addressed with materials outside the pleadings, that is not the case here.

*7 ¶ 36 A&R argues that the circuit court did not identify defects apparent on the face of the second amended complaint and instead “jump[ed] straight to resolving the declaratory judgment issue on its merits.” Even if the circuit court treated the enforceability of the intentional act exclusion more like an affirmative matter that defeated A&R’s claims, we need not reverse on that basis. Dismissal under section 2-615 is warranted as well. See Coghlan v. Beck, 2013 IL App (1st) 120891, ¶ 24 (we review the judgment, not the reasoning, of the circuit court, and may affirm on any grounds in the record, regardless of whether the circuit court relied on those grounds or whether the circuit court’s reasoning was correct). A&R’s complaint alleged that West Virginia law applies to this case. It contained a section titled “Choice of Law,” which alleged that “West Virginia law applies to this coverage dispute.” The complaint also alleged that Russell rendered the WC policy’s Intentional Act Exclusion unenforceable. However, the circuit court correctly concluded that Illinois law applies to this case. A&R did not allege that the intentional act exclusion was unenforceable for any reason in Illinois, so it failed to state any grounds upon which relief could be granted in Illinois. That is precisely the section 2-615 analysis. See Doe-3, 2012 IL 112479, ¶ 16. Accordingly, we find that the circuit court’s dismissal of the second amended complaint pursuant to section 2-615 was appropriate.

¶ 37 C. Counts I and II Under Illinois Law

¶ 38 A&R next argues that count I, seeking declaratory judgment, and count II, alleging breach of contract, “are cognizable causes of action under Illinois law” and should not have been dismissed.⁴ Defendants maintain that A&R forfeited this argument by raising it for the first time in its motion to reconsider the dismissal of the second amended complaint. The circuit court agreed and denied the motion to reconsider based in part on A&R’s forfeiture of this argument.

¶ 39 “The purpose of a motion to reconsider is to bring to a court’s attention: (1) newly discovered evidence; (2) changes in the law; or (3) errors in the court’s previous application of existing law.” Liceaga v. Baez, 2019 IL App (1st) 181170, ¶ 25. A new legal theory cannot serve as the basis of a motion to reconsider. Id. So, a legal theory that was not advanced previously is forfeited. Id. We agree that A&R forfeited its argument that count II stated a claim under Illinois law because A&R made that argument for the first time in its motion to reconsider. See Evanston Insurance Co. v. Riseborough, 2014 IL 114271, ¶ 36 (“Arguments raised for the first time in motion for reconsideration in the circuit court are forfeited on appeal.”). But that is not true of count I. A&R’s response to defendants’ motion to dismiss the second amended complaint included a footnote stating that “[i]t is self-evident that the pleading requests relief in an Illinois court pursuant to the Illinois Declaratory Judgment Act.” That is sufficient to avoid forfeiture. See Tabora v. Gottlieb Memorial Hospital, 279 Ill. App. 3d 108, 114 (1996) (a footnote can be enough to avoid forfeiture).

¶ 40 However, that argument fails on the merits. Count I of the second amended complaint made no mention of Illinois law or the Illinois Declaratory Judgment Act (735 ILCS 5/2-701 (West 2014)). The complaint repeatedly alleged that West Virginia law governs this coverage dispute, going so far as to have a separate section dedicated to that proposition. As noted above, A&R alleged the intentional act exclusion is unenforceable only because of Russell, not because of ambiguity or any other issue in Illinois law.⁵ Illinois is a fact pleading jurisdiction, so we cannot infer through liberal construction that A&R meant to plead count I under Illinois law when the complaint explicitly alleged that West Virginia law applies. See Lake County Grading Co. of Libertyville, Inc. v. Advance Mechanical Contractors, Inc., 275 Ill. App. 3d 452, 456-57 (1995). Moreover, even if A&R had not forfeited its argument with respect to count II, that argument would fail on the merits for the same reasons. Count II alleged that American breached the insurance agreement by enforcing the intentional act exclusion when that exclusion had, in A&R’s view, been rendered unenforceable due to Russell. A West Virginia Supreme Court decision cannot serve as the basis for a breach of contract claim under Illinois law. Accordingly, we find that count I of the second amended complaint did not plead a claim for declaratory relief under Illinois law.

¶ 41 D. Leave to Amend

*8 ¶ 42 Finally, A&R contends that the circuit court’s dismissal of the second amended complaint was a harsh result, and that it should have allowed A&R to amend its complaint. “The decision whether to grant leave to amend a complaint rests within the sound discretion of the circuit court, and its decision will not be reversed absent an abuse of that discretion.” Atlas v. Mayer Hoffman McCann, P.C., 2019 IL App (1st) 180939, ¶ 39. To determine whether the circuit court abused its discretion in not granting leave to amend a pleading, we consider (1) whether the proposed amendment would cure any defects in the pleading, (2) whether the party opposing the amendment would be prejudiced, (3) the timeliness of the proposed amendment, and (4) whether the party seeking leave to amend had previous opportunities to amend. Abramson v. Marderosian, 2018 IL App (1st) 180081, ¶ 30 (citing Loyola Academy v. S & S Roof Maintenance, Inc., 146 Ill. 2d 263, 273 (1992)).

¶ 43 These factors lead us to conclude that the circuit court did not abuse its discretion in not allowing A&R to file a third amended complaint. Presumably, A&R would have amended counts I and II to plead them under Illinois law instead of West Virginia law. Even if this amendment would have cured facial defects of the complaint, it would have been untimely and prejudicial to defendants. From the outset of this case, defendants recognized that A&R was asking an Illinois court to enforce only West Virginia law and moved to dismiss A&R’s first three complaints. A&R was on notice that its choice-of-law argument might not be successful, and it could have pled alternative legal theories even if they were inconsistent. See Bureau Service Co. v. King, 308 Ill. App. 3d 835, 841 (1999); 735 ILCS 5/2-613(b) (West 2014) (allowing pleading in the alternative “regardless of consistency”). However, A&R never pled any grounds for relief under Illinois law. It was reasonable for the circuit court to conclude that A&R did not intend to seek relief under Illinois law and to dismiss the complaint rather than allowing A&R to amend yet again. Accordingly, we affirm the dismissal of A&R’s second amended complaint with prejudice.

¶ 44 III. CONCLUSION

¶ 45 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 46 Affirmed.

Presiding Justice McBride and Justice Reyes concurred in the judgment.

All Citations

Not Reported in N.E. Rptr., 2023 IL App (1st) 221256-U, 2023 WL 3093577

Footnotes

A&R filed two separate lawsuits against American and Zurich, which were consolidated in the circuit court. According to A&R’s second amended complaint, American and Zurich are related insurance companies under common control. Defendants state that they are two different insurance carriers that are commonly owned and managed.
We refer to A&R by its name instead of “plaintiff” to avoid confusion between the plaintiff in this lawsuit and Toth, the plaintiff in his workplace injury lawsuit against A&R.
Our research indicates that Russell has not been extended to the language of any insurance policy aside from the policy that was before the West Virginia courts in that case.
A&R’s reply brief acknowledges that count III, alleging a breach of the implied covenant of good faith, and count IV, alleging violations of West Virginia insurance law, “require the application of West Virginia law to avoid dismissal since they are not viable causes of action under Illinois law.”
A&R’s reply brief states that A&R “is prepared to argue that the [Intentional Act] Exclusion would also be unenforceable under Illinois law for several reasons, including that the plain language of the Exclusion means it is only intended to apply to claims brought under West Virginia Workers’ Compensation Laws.” The second amended complaint did not allege that. In any event, the WC policy itself excludes coverage for intentional injury separately from the intentional act exclusion and without reference to any particular state.

End of Document