Panel Affirms Insurer Not Liable for Recording Call with Lawyer

By Don R. Sampen, published, Chicago Daily Law Bulletin, July 25, 2023

The 1st District Appellate Court recently held that an insurance company’s recording of a conversation between the insured’s attorney and the insurer’s claims representative did not violate the Illinois eavesdropping statute, 720 ILCS 5/14-1 et seq.

The case is Cook Au Vin, LLC v. Mid-Century Insurance Co., 2023 IL App (1st) 220601. The insured, the plaintiff bakery and catering company, was represented by Fuksa Khorshid LLC of Chicago. Locke Lord LLP of Chicago represented the insurer, Mid-Century.

The plaintiff submitted a claim to Mid-Century in 2020 for business interruption losses due to the COVID-19 pandemic. Upon submission a Mid-Century claims representative called the plaintiff’s attorney and, after the exchange of preliminary information, advised the attorney that the call was being recorded for customer service purposes.

When the attorney objected to the recording on behalf of his client, the claims representative advised that he could not turn off the recording device. The conversation concluded shortly thereafter with agreement to follow up by email.

The plaintiff subsequently brought a class action for violation of the Illinois eavesdropping statute. That statute prohibits the surreptitious recording of a private conversation by one not a party to the conversation and also by one who is a party but does so without the consent of all other parties.

Mid-Century moved to dismiss under 735 ILCS 5/2-619 and 2-615, and the trial court granted the motion. The plaintiff brought this appeal.

Analysis

In an opinion by Justice Debra B. Walker, the 1st District affirmed. She initially addressed the ground for dismissal under Section 2-619, which was based on a lack of standing. The plaintiff here acknowledged its attorney was party to the conversation, not the plaintiff itself, so the question became whether the alleged injury sustained by the attorney could be imputed to the client.

Walker held in the negative. She observed generally that a party must assert its own legal rights and interests, rather than a claim based on the rights of third parties. And even though a corporation can be a party to a private conversation through its officers and employees, the attorney’s role here differed from that of a corporate officer. Hence, dismissal was proper under Section 2-619.

Even if the plaintiff had standing, wrote Walker, dismissal was still proper under Section 2-615. She noted the statute required both a “surreptitious” recording and a “private” conversation. As to the former requirement, the plaintiff argued that a portion of the conversation took place prior to the disclosure of the recording taking place.

Walker found, however, the claims representative informed the attorney of the recording as soon as she had the opportunity to do so. The plaintiff therefore could not plead facts to support the claim that the conversation was surreptitiously recorded.

Also, the conversation was not a “private” one, according to Walker. It was not private because the claims representative called the attorney to obtain information to process the plaintiff’s insurance claim, and the plaintiff must have expected that the information would be passed on to Mid-Century’s other employees. Mid-Century also had a valid reason for the recording, namely, to have an accurate record of the bases for the plaintiff’s insurance claim.

The 1st District therefore affirmed the dismissal in favor of Mid-Century.

Key Points

• An insurer that wishes to record telephone conversations with its insured or insured’s representative, or, for that matter, other persons, should inform all persons on the call of the recording as early during the call as possible and should terminate the call if anyone objects.
  
• A party that wishes to enforce a personal right must demonstrate a personal injury and may not ordinarily rely on an injury to the party’s representative.