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Auto-Owners Insurance Co. v. Websolv Computing, Inc.

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ARGUED SEPTEMBER 3, 2008

Before EASTERBROOK, Chief Judge, and CUDAHY and SYKES, Circuit Judges.

This insurance-coverage dispute involves the interpretation of an “advertising injury” clause in a commercial general liability policy. Websolv Computing, Inc., was sued in Illinois state court for sending an unsolicited fax advertisement to a dental office. Websolv tendered the defense of this suit to its insurer, Auto-Owners Insurance Company, which accepted it under a reservation of rights. Auto-Owners then filed this action in federal court seeking a declaratory judgment that it had no duty to defend Websolv in the underlying Illinois suit. The district court applied Illinois law and held that Websolv’s policy with Auto-Owners covered the claim. We reverse. Iowa law-not Illinois law-applies here. Under Iowa law the insurance policy does not require Auto-Owners to defend Websolv in the underlying suit.

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