Cook Au Yin v. Mid-Century Ins. Co.

226 N.E.3d 694

2023 IL App (1st) 220601

COOK AU YIN, LLC an Illinois Limited Liability Company, for Itself and on Behalf of All Others Similarly Situated, Plaintiff-Appellant,

v.MID-CENTURY INSURANCE COMPANY, a California Corporation, Defendant-Appellee.

No. 1-22-0601

Appellate Court of Illinois, First District, Third Division.

Filed May 24, 2023

Appeal from the Circuit Court of Cook County, No. 2020 CH 06260, Honorable Anna Demacopoulos, Judge, Presiding.

William E. Meyer Jr., Blake W. Buether, Vincent Formica, and Lauren K. Miller, of Fuksa Khorshid, LLC, of Chicago, for appellant.

Brian I. Hays, Randall A. Hack, and Heidi L. Brady, of Locke Lord LLP, of Chicago, for appellee.

OPINION

JUSTICE D.B. WALKER delivered the judgment of the court with opinion.

¶ 1 Plaintiff Cook Au Vin, LLC, appeals the trial court’s dismissal of its class-action complaint alleging that defendant Mid-Century Insurance Company (Mid-Century) violated the Illinois eavesdropping statute (720 ILCS 5/14-1 et seq. (West 2020)). On appeal, plaintiff contends the trial court erred in dismissing its complaint where (1) plaintiff was a party to the phone conversation between its attorney and Mid-Century’s representative and (2) plaintiff’s second-amended complaint alleged sufficient facts to show that Mid-Century surreptitiously recorded the phone call without plaintiff’s consent. For the following reasons, we affirm.

¶ 2 I. BACKGROUND

¶ 3 Plaintiff is a bakery and catering company servicing Chicago since 2005. In March 2020, plaintiff suffered financial hardship due to government closure orders related to the COVID-19 pandemic. At the time, plaintiff possessed a commercial general liability policy issued by Mid-Century. Plaintiff sought coverage under the policy for more than $360,000 in business interruption losses and expenses sustained as a result of the government-mandated closures. Plaintiff’s principal, Vincent Colombet, retained attorney William E. Meyer to represent plaintiff in the claim.

¶ 4 Plaintiff submitted the claim on July 2, 2020, and that same day, claim representative Erin Dufner contacted Meyer in relation to the claim. Dufner and Meyer had the following conversation over the phone:

"MEYER: Hello?

DUFNER: Hi, may I please speak with Bill Meyer?

MEYER: Who’s calling?

DUFNER: This is Erin from Farmer’s [sic] Insurance¹ calling in regards to a claim that was reported to us for Cook Au Vin, LLC.

MEYER: Ok, thank you for calling—let me get my notes so I can uh take down your name and phone number and all that. Give me one moment—

DUFNER: Sure.

MEYER: Just a moment. Bear with me one moment while I grab something to write with. All right, thanks for waiting, and I’m sorry, what was your name again?

DUFNER: Erin. That’s E-R-I-N.

MEYER: Yes.

DUFNER: And my last name is Dufner. D-U-F-N-E-R.

MEYER: D-U-F-N-E-R. Is this phone number the best to reach you at? ***

DUFNER: Yes.

MEYER: *** and area code ***.

DUFNER: Yep.

MEYER: And area code ***.

DUFNER: That’s it.

MEYER: All right, thank you.

DUFNER: All right and I do need to let you know that our calls are being recorded for customer service purposes.

And—

MEYER: Yeah, I really would—really would prefer that the call, the phone call not be recorded.

DUFNER: Um, I don’t know that’s actually even possible—um, like I don’t have any way of turning that off, I’d have to maybe reach out to like an IT person or HR or something—

MEYER: Yeah—all right why don’t you—

DUFNER: It’s just automatic on our phones.

MEYER: Yeah why don’t you find out about that—um then we can continue the conversation after you find the option to not have the phone call recorded. DUFNER: Ok.

MEYER: And just so I understand, just so I understand correctly what you’re saying is at least as we’re sitting here right now we are, we are being recorded, right?

DUFNER: Correct. Yes.

MEYER: Ok.

DUFNER: And do you have an attorney letter of representation for the insured that you can send over?

MEYER: Uh—what, what do you mean by ‘attorney letter of representation?’

DUFNER: Uh, well if you are speaking or working on behalf of our insured we have to have a letter of representation on file.

MEYER: Ok well I’m happy if you email me the—to provide you that information as well.

DUFNER: Ok.

MEYER: That’s perhaps the most efficient way to do it.

DUFNER: Ok.

MEYER: I’ll give you my email address. Do you already have the email address in the claim?

DUFNER: Um. Let me see here—I’ve got ‘william@F-K-L-A-W-F-I-R-M.com.’

MEYER: Yeah that’s correct.

DUFNER: Ok. So I’ll have to—

MEYER: And the Client and I really—oh I’m sorry go ahead.

DUFNER: Um *** we’ll send you a, uh link that you actually have to sign terms and conditions for email communications or I can’t email you directly ***.

MEYER: Ok and just so we’re really clear on this recording, both I and my client do not consent to recording of phone calls and this phone call is at least so far [sic] has been in violation of the Illinois Eavesdropping statute—so we do have an objection to that. And uh, look forward to receiving your email and we can proceed further.

DUFNER: Ok, alright, thank you.

MEYER: Goodb—"

¶ 5 Based on that conversation, plaintiff filed a class-action complaint against Mid-Century on October 13, 2020, and filed an amended complaint on March 26, 2021. Mid-Century moved to dismiss the amended complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2020)). The trial court granted the motion to dismiss without prejudice.

¶ 6 On November 12, 2021, plaintiff filed a second-amended complaint. The complaint alleged that plaintiff retained attorney Meyer to represent plaintiff in its insurance claim. The complaint also alleged that Mid-Century, "by and through its claim representative Erin Dufner," called plaintiff "through counsel, William E. Meyer, Jr." When Dufner stated that the call was being recorded, plaintiff, "through counsel William Meyer," requested that Dufner cease recording the conversation, Meyer informed Dufner that he was plaintiff’s attorney and neither he nor plaintiff consented to the recording. Plaintiff alleged that Mid-Century violated the eavesdropping statute by surreptitiously recording the telephone conversation without obtaining plaintiff’s consent.

¶ 7 Mid-Century filed a combined motion to dismiss the second-amended complaint with prejudice under section 2-619.1 (id. § 2-619.1) of the Code where (1) pursuant to section 2-615, plaintiff could not allege facts to support a violation of the eavesdropping statute and (2) pursuant to section 2-619(a)(9) (id. § 2-619(a)(9)), plaintiff lacked standing to prosecute the claim where plaintiff was not a party to the phone call.

¶ 8 On March 31, 2022, the trial court granted Mid-Century’s section 2-619 motion to dismiss with prejudice because plaintiff "lack[ed] standing to pursue a claim under" the eavesdropping statute.

The court also found that dismissal was proper under section 2-615 regarding the conversation that occurred after Dufner notified Meyer of the recording. However, dismissal under section 2-615 was not appropriate regarding the "portion of the conversation from the moment the call began until the point that [Dufner] announced that the call was being recorded," because a question of fact existed as to whether Mid-Century surreptitiously recorded that conversation. Plaintiff now appeals.

¶ 9 II. ANALYSIS

¶ 10 A. Dismissal Under Section 2-619

[1–4] ¶ 11 The trial court granted Mid-Century’s section 2-619 motion to dismiss plaintiff’s complaint with prejudice for lack of standing. Dismissal under section 2-619 is appropriate where "the claim asserted *** is barred by other affirmative matter avoiding the legal effect of or defeating the claim." Id. "Affirmative matter" is "something in the nature of a defense that negates the cause of action completely or refutes crucial conclusions of law or conclusions of material fact contained in or inferred from the complaint." Glisson v. City of Manon, 188 Ill. 2d 211, 220, 242 Ill.Dec. 79, 720 N.E.2d 1034 (1999). When reviewing a dismissal under section 2-619, "[t]he relevant question is whether there exists a genuine issue of material fact precluding dismissal, or absent an issue of material fact, whether dismissal is proper as a matter of law." Fuller Family Holdings, LLC v. Northern Trust Co., 371 Ill. App. 3d 605, 613, 309 Ill.Dec. 111, 863 N.E.2d 743 (2007). We accept all well-pled facts as true and construe those facts in the light most favorable to the nonmoving party. 1002 E. 87th Street, LLC v. Midway Broadcasting Corp., 2018 IL App (1st) 171691, ¶ 13, 424 Ill.Dec. 149, 107 N.E.3d 868. We review a section 2-619 dismissal de novo. Solaia Technology, LLC v. Specialty Publishing Co., 221 Ill. 2d 558, 579, 304 Ill.Dec. 369, 852 N.E.2d 825 (2006).

[5–9] ¶ 12 On appeal, plaintiff contends that dismissal was improper because it had standing to pursue an eavesdropping claim. The doctrine of standing serves to preclude those who have no interest in a controversy from filing a cause of action. Glisson, 188 Ill. 2d at 221, 242 Ill.Dec. 79, 720 N.E.2d 1034. Generally, standing requires some injury in fact to a legally cognizable interest. Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 492, 120 Ill.Dec. 531, 524 N.E.2d 561 (1988). Lack of standing is an affirmative defense that defendant must plead and prove. Beyer v. Board of Education of Chicago, 2019 IL App (1st) 191152, ¶ 44, 442 Ill.Dec. 906, 160 N.E.3d 1086. Whether a party has standing is a question of law that we review de novo. Powell v. Dean Foods Co., 2012 IL 111714, ¶ 35, 358 Ill. Dec. 333, 965 N.E.2d 404.

[10, 11] ¶ 13 Initially, standing requires that plaintiff be a "real party in interest" in the litigation. Lyons v. Ryan, 201 Ill. 2d 529, 534-35, 269 Ill.Dec. 374, 780 N.E.2d 1098 (2002). A party in interest "has an actual and substantial interest in the subject matter of the action, as distinguished from one who has only a nominal,...