American Family Insurance v. Roth

SUPREME COURT CASES

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State: Illinois

Court: 1st District Appellate

Docket No: 1-07-0526 Rel

Case Date: 03/31/2008

Preview:SECOND DIVISION March 31, 2008

No. 1-07-0526 AMERICAN FAMILY MUTUAL INSURANCE COMPANY, ) ) ) Plaintiff-Appellee, ) v. ) ) CONNIE ROTH, Individually and d/b/a/ ) Roth and Roth Insurance Agency, Inc.; ) BONNIE ROTH, Individually and d/b/a Roth ) and Roth Insurance Agency, Inc.; and ROTH AND ) ROTH INSURANCE AGENCY, INC., d/b/a ) Roth and Roth Insurance, ) ) Defendants-Appellants. )

Appeal from the Circuit Court of Cook County.

Honorable William O. Maki, Judge Presiding.

JUSTICE SOUTH delivered the opinion of the court: This appeal arises from an order of the circuit court of Cook County that granted plaintiff's motion for summary judgment, holding that plaintiff, American Family Mutual Insurance Company (American Family), did not have a duty to defend defendants pursuant to the terms and conditions of the businessowners package policy it issued to defendants. American Family instituted this declaratory judgment action against defendants seeking a determination of its duty to defend the insureds in an underlying federal court action (American Family Mutual Insurance Co. v. Roth, No. 05 C 3839) (hereinafter referred to as the underlying action). The basis of the underlying action was alleged misappropriation of trade secrets. American Family is a Wisconsin-based insurer that underwrites a broad base of commercial and personal lines of insurance products. Defendants Bonnie Roth and Connie Roth

1-07-0526 are the owners of an Aurora, Illinois, insurance agency known as Roth & Roth Insurance. Both Bonnie and Connie worked as exclusive agents of American Family pursuant to the terms of written agency agreements. Connie became an agent in July 1997, and Bonnie became an agent in December 2002. The agent agreements provided in part that the policies, endorsements, policy records, manuals, materials and supplies furnished by American Family to defendants remained American Family's property and had to be returned within 10 days of the termination of the agency agreements. This included all copies that were in defendants' possession and control. The agreements also contained nonsolicitation clauses that prohibited defendants from soliciting American Family policyholders credited to their account or from inducing them to cancel or replace their American Family policies for one year following the termination of the agent agreements. The agreements also contained a choice of law provision, which provided they would be governed by Wisconsin law. Additionally, the agent agreements contained a database agreement endorsement that defendants also signed. The database agreements governed defendants' access to American Family's proprietary computer system, software, and database, as well as the return of hard files upon termination of the agency relationship. The database also included customer lists and confidential customer information. The Wisconsin Uniform Trade Secrets Act (Wis. Stat. Ann.

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