IN THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI AT KANSAS CITY ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) PETITION FOR DECLARATORY JUDGMENT (EA)

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1 IN THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI AT KANSAS CITY GOANS ACQUISITION, INC., individually and on behalf of all others similarly-situated, v. Plaintiff, QBE INSURANCE CORPORATION, Serve: QBE Insurance Corporation c/o Director of Insurance 301 W. High Street, Room 530 Jefferson City, MO and HARD WOK CAFES, INC. d/b/a WOK & ROLL, Serve: Hard Wok Cafes, Inc. c/o Jane Jacobs, Registered Agent 8812 Holmes Road Kansas City, MO Defendants. - Case No :""0" ;_ Div. No. --"?"...,..._ N C -o J: w w -.,.:.""'r c rr1 :J!.~t::J ' " :. --\,..-} -..1'.-;v -. r:-- -~-.. (_= -i -:,...-,..--, n r~ ' ~C: - :;o n-1 PETITION FOR DECLARATORY JUDGMENT (EA Plaintiff, GOANS ACQUISITION, INC. ("Plaintiff' brings this action on behalf of itself and the other members of the class it represents, through its attorneys, and alleges the following against Defendants: NATURE OF ACTION 1. This is an action for declaratory relief pursuant to Ru1e Plaintiff seeks a declaration by this Court concerning the rights and obligations under the business policies issued by QBE INSURANCE CORPORATION ("QBE" to Hard Wok Cafes, Inc. d/b/a Wok & Roll ("Wok".

2 JURISDICTION AND VENUE 3. Jurisdiction is proper because Defendants transact business in this state and QBE issued the subject insurance policies within this state. 4. Venue is proper in Jackson County because Wok has a registered agent in Jackson County. PARTIES 5. Plaintiff is a Missouri corporation with a principal place of business in Springfield County, Missouri. 6. On information and belief, QBE is an insurance company with a principal place of business in Philadelphia, Pennsylvania that does business in Missouri. 7. On information and belief, Wok is a Missouri corporation with a principal place of business in Joplin, Missouri and a registered agent in Jackson County, Missouri. THE UNDERLYING LAWSUIT 8. On November 30, 2009, Plaintiff instituted a civil class action captioned "Goans Acquisition, Inc., individually and as the representative of a class of similarly-situated persons v. Hard Wok Cafes, Inc.," Case No CV17797, in the Circuit Court of Greene County, Missouri (the "Underlying Action". The First Amended Complaint in the Underlying Action (the "Underlying Complaint" is attached as Exhibit A. 9. In the Underlying Action, Plaintiff sought relief on behalf of itself and a class of similarly situated plaintiffs who also received junk faxes from Wok. 10. The Underlying Complaint alleged that Wok sent unsolicited junk faxes to Plaintiff and hundreds of others. 2

3 11. The Underlying Complaint contains two counts: Count I is for violations of the Telephone Consumer Protection Act ("TCPA", 47 U.S.C. 227; and Count II is for common law conversion. 12. Both claims were pled as class actions. The proposed classes each included "[a]ll persons who on or after five years prior to the filing of this action..." 13. The Underlying Complaint alleged that Wok knew or should have known that their misappropriation of Plaintiffs resources was wrongful and without authorization. 14. Wok tendered the defense ofthe Underlying Action to QBE, and QBE denied the tender and disclaimed all coverage obligations. QBE's denial letter is attached as Exhibit B. 15. On June 2, 2011, the Court in the Underlying Action granted Plaintiff's motion for class certification. A copy of the Class Certification Order is attached as Exhibit C. 16. On January 5, 2012, the Court in the Underlying Action entered fmaljudgment in favor of Plaintiff and the Class and against Wok. A copy of the Judgment Order is attached as Exhibit D. 17. The Judgment found that "Hard Wok's faxes were sent to the class members 9,752 times on December 6, 2005 or December 7, 2005." 18. The Underlying Court entered judgment against Wok m the amount of $14,628, Wok's QBE Policy 19. Upon information and belief, QBE issued annual renewal insurance policies, numbered SIM , that provided liability coverage to Wok (the "Policies". In the Underlying Action, Wok produced copies of policies with effective dates of July 16, 2004 to July 3

4 16, 2005 (the "04-05 Policy" and July 16, 2005 to July 16, A copy of the Policy is attached as Exhibit E. A copy of the Policy is attached as Exhibit F To the extent that discovery in this action establishes that there are additional policies, or that there are different, or additional, terms in the Policies, Plaintiff reserves the right to amend its Complaint to reflect the new information or evidence. COVERAGE FOR THE CLAIMS IN THE UNDERLYING ACTION 21. Upon information and belief, the Policies offer coverage for damages because of "property damage" and "advertising injury." The "property damage" coverage includes both coverage under the policy's general aggregate limits and "products-completed operations" coverage, which has a separate policy limit. I. Property Damage (Including Products-Completed 22. Upon information and belief, the Policies offer coverage to Wok for his liability for property damage "caused by an 'occurrence' that takes place in the 'coverage territory"' during the policy period. 23. Upon information and belief, the Policies defme property damage as "a. Physical injury to or destruction of tangible property, including all resulting use of that property... or b. Loss of use of tangible property that is not physically injured..." 24. Upon information and belief, the Policies define "occurrence" in the context of "property damage" as "an accident, including continuous or repeated exposure to substantially the same harmful conditions." 25. Upon information and belief, the Policies define "coverage territory" as including "a. The United States of America..." 4

5 26. Plaintiff and the other members of the class received junk faxes from Wok during the policy periods of the Policies. 27. The junk faxes were sent by Wok and received by Plaintiff and the other putative class members within the United States. 28. The junk faxes Plaintiff and the other putative class members received physically injured their personal property, including but not limited to fax toner and paper. 29. The junk faxes Plaintiff and the other putative class members received caused them to lose the use of their personal property, including but not limited to the use of their fax machines during the fax transmissions. 30. To the extent not sent with a specific intent to wrongfully take possession of Plaintiffs and other class members' property, or to violate the TCPA, the junk faxes meet the policy definition of "accident"-which, on information and belief, the Policies do not define. 31. Upon information and belief, the Policies offer coverage to Wok for his liability for property damage both included and not included within the "products-completed operations hazard." 32. Upon information and belief, the Policies define "products-completed operations hazard" as including all "'property damage' arising out of 'your product' or 'your work' except products that are still in your physical possession or work that has not yet been completed or abandoned. The...'property damage' must occur away from premises you own or rent...." 33. Upon information and belief, the Policies define "your product" as "[a]ny goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by (a you; [or] (b others trading under your name..." 5

6 34. Upon information and belief, the Policies' definition of "your product" explicitly "[i]ncludes: (1 [w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use of' "your product." 35. Upon information and belief, the Policies defme ''your work" as "(1 Work or operations performed by you or on your behalf; and (2 Materials, parts or equipment furnished in connection with such work or operations." 36. Upon information and belief, the Policies' definition of ''your work" explicitly "[i]ncludes: (1 [w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use of' "your work." 37. The property damage caused by Wok's junk faxes occurred at the premises of Plaintiff and the other class members. 38. The junk faxes were goods distributed by Wok or someone acting in Wok's name. 39. Wok's fax advertising program was part of his operations and was undertaken by Wok or on his behalf. 40. The junk faxes were materials furnished in connection with Wok's operations. 41. The junk faxes contained representations made about fitness, quality, durability, and/or performance of Wok's services. 42. Therefore, any property damage caused by the junk faxes is covered under the Policies' products-completed operations hazard. II. Advertising Injury 43. Upon information and belief, the Policies offer coverage to Wok for his liability for advertising injury "caused by an 'occurrence' committed in the 'coverage territory' during 6

7 the policy period" that was "committed in the course of advertising your goods, products or services." 44. Plaintiff repeats and realleges the allegations contained in Paragraphs Upon information and belief, the Policies define "occurrence" in the context of "advertising injury" as "the commission of an offense, or a series of similar or related offenses, which results in...'advertising injury."' 46. Upon information and belief, the Policies define "advertising injury" as including "injury... arising out of... [ o ]ral or written publication of material that violates a person's right of privacy." 47. Wok's transmission of junk faxes arose out of his business. 48. Wok's transmission of unwanted junk faxes to Plaintiff and the other putative class members constitutes the publication of material that violates Plaintiffs and the other putative class members' right of privacy. 49. For all of these reasons, QBE was required to defend Wok in the Underlying Action. 50. QBE did not defend Wok, and a Final Judgment was entered against Wok. 51. Therefore, QBE must pay the resulting judgment. 52. For the reasons stated herein, Plaintiff is entitled to a declaration from this Court that the Policies afford coverage for the damages awarded in the Underlying Action and that QBE had a duty to defend and indemnify Wok in the Underlying Action. 53. The contentions of Plaintiff in Paragraph 52 are, on information and belief, denied by QBE who, in turn, contends that Wok is not entitled to defense or indemnity under the 7

8 Policies in the Underlying Action. Plaintiff, in turn, denies the contrary contentions of QBE and each of them. 54. By reason of the foregoing, an actual and justiciable controversy exists between the parties and each of them, which may be determined by a judgment or Order of this Court. This Court has the power to declare and adjudicate the rights and liabilities of the parties. WHEREFORE, Plaintiff, GOANS ACQUISITIONS, INC., individually and as the representative of a certified class, prays that this Court enter an order as follows: A Declaring that the Policy requires QBE to defend Wok in the Underlying Action; B Declaring that the Policy requires QBE to indemnify Wok for Judgment entered against it in the Underlying Action; and C Awarding Plaintiff, individually and on behalf of the class, its costs and such further relief as the Court deems appropriate. Respectfully submitted, Noah K. Wood noab(~~woodla,,.com Michael T. Miller mike@ 1woodJa,,.com Wood Law Firm, LLC. noo Main Street, Suite 1648 Kansas City, MO ( Fax: ( noah@1\modhm.com Max G. Margulis, # Margulis Law Group Cedar Springs Dr. Chesterfield, MO ( MO Bar #51249 MO Bar #

9 Brian J. Wanca (pro hac vice to be submitted Ryan M. Kelly (pro hac vice to be submitted ANDERSON+ WANCA 3701 Algonquin Road, Suite 760 Rolling Meadows, IL 6ooo8 ( Fax: ( Phillip A. Bock (pro hac vice to be submitted Tod Lewis (pro hac vice to be submitted 134. N. La Salle Street, Suite 760 Chicago, IL ( soo Fax: ( COUNSEL FOR PLAINTIFF Goans Acquisition, Inc. v. OBE Insurance Corporation 9