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TRAVELERS INDEM. CO. OF ILLINOIS v. MOORE

September 5, 1986

THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS, PLAINTIFF,
v.
ROY MOORE, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF GREGORY MOORE; SHIRLEY MOORE; ERIC MOORE; ALLEN TOMLINSON; NANCY TOMLINSON; CRITIC MILLS, INC.; WASHINGTON HOSPITAL CENTER; BURLINGTON NORTHERN RAILROAD; THE ROYAL INSURANCE COMPANY OF AMERICA; AETNA CASUALTY AND SURETY OF ILLINOIS; ILLINOIS DEPARTMENT OF PUBLIC AID; EMPLOYERS OF WAUSAU INSURANCE; FIRST STATE INSURANCE, DEFENDANTS.



The opinion of the court was delivered by: Mills, District Judge:

OPINION AND ORDER

We apply here the concept of "depecage".

On April 1, 1982, an explosion occurred at a welding shop in Cass County, Illinois, resulting in serious injury to three persons named as Defendants in this lawsuit. Sometime after the explosion, the insurance carrier for the shop, the Travelers Indemnity Company of Illinois (Travelers), filed this statutory interpleader action pursuant to 28 U.S.C. § 1335 against Roy Moore (administrator of the estate of Gregory Moore, who was killed in the explosion), the Washington Hospital Center of Washington, D.C. (which treated Gregory Moore), and a variety of other parties.

The action seeks a declaratory judgment as to how the proceeds of the insurance policy covering the shop, currently deposited in escrow by Travelers, should be distributed. Presently before the Court are cross motions for summary judgment on Counts I and II of Washington Hospital's cross-claim against Moore, which seeks a declaration that as a result of services it provided to Gregory Moore, the hospital has a valid and enforceable lien against (1) the estate of Gregory Moore, and (2) the proceeds of any wrongful death claim Moore may have against any negligent party. Also before the Court are motions for summary judgment filed by other parties asserting claims to the proceeds of the insurance policy.*fn1 These parties move for summary judgment on their cross-claims against Washington Hospital for declaratory relief to the effect that the hospital has no lien or claim to those proceeds.

Summary Judgment Standard

Summary judgment is proper only when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In determining whether an issue of material fact exists, the Court must construe the facts alleged in the light most favorable to the party opposing the motion for summary judgment. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Stumph v. Thomas & Skinner, Inc., 770 F.2d 93, 97 (7th Cir. 1985). Cross motions for summary judgment require no less careful scrutiny of the factual allegations. LacCourte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983). In determining whether such undisputed facts entitle one of the parties to judgment in their favor, the Court's inquiry "unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the [moving party] is entitled to a verdict — `whether there is [evidence] upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.'" Anderson v. Liberty Lobby, Inc., ___ U.S. ___, ___, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (quoting Improvement Co. v. Munson, 14 Wall. 442, 448, 81 U.S. 442, 20 L.Ed. 867 (1872) (emphasis in original)).

The parties are essentially in agreement as to the facts that are necessary to resolve the issues presented by the motions now before the Court. The entry of summary judgment is therefore appropriate. Before turning to the issues presented by these motions, a brief review of the facts of this case is necessary.

Background

On May 30, 1982, Washington Hospital sent a statement for the treatment of Gregory Moore to 704 Railroad Street, Beardstown, Illinois, the address contained under patient identification in the hospital's records and the same address that Roy Moore wrote on the Washington Hospital's return envelope as his own address. On June 28, 1982, Roy Moore was appointed Administrator of the Estate of Gregory Moore, Deceased, by the Circuit Court of Cass County, Illinois. Letters of office were issued on that date. In a letter dated July 6, 1982, William Allison notified the hospital that he was the attorney for the estate of Gregory Moore and requested a copy of the itemized hospital charges. On July 12, 1982, the hospital submitted to William Allison its itemized statement of hospital charges for treatment provided to Gregory Moore.

Washington Hospital sent additional statements for hospital charges to Roy Moore. In response, Roy Moore wrote a letter to the hospital dated September 18, 1982, informing the hospital that a lawsuit was pending and that all bills for Gregory Moore were to be sent to the Illinois Department of Public Aid. There is no written contract between Moore and the hospital.

On July 17, 1982, Washington Hospital filed a hospital lien for medical services rendered to the decedent pursuant to the District of Columbia Code, §§ 38-301 et seq. (1981)*fn2, in the amount of $237,081.60 and notice of said lien was served upon Travelers, Aetna*fn3, Critic Mills, Edwards, the State of Illinois, Attorney William Allison, and Roy Moore, prior to the payment of any money to the injured person, his attorney or his legal representative.

On September 21, 1984, Travelers Indemnity Company of Illinois (Travelers), the insurance carrier for Steve Edwards, Robert J. Edwards, and Edwards Welding Shop (Edwards), filed the underlying interpleader action, pursuant to 28 U.S.C. § 1335, naming Washington Hospital and the Moores among others as Defendants. Pursuant to this Court's order of September 25, 1984, Travelers deposited $300,000 in an escrow account as full satisfaction of its liability under its insurance policy issued to Edwards and on April 11, 1985, the Court entertained Travelers' motion for summary judgment. Finding that Travelers was a disinterested stakeholder faced with conflicting claims and demands far in excess of the insurance policy limits, this Court granted Travelers' motion for summary judgment and ordered the following relief, pursuant to 28 U.S.C. § 2361:

  1. That all parties hereto are restrained and
  enjoined permanently from instituting or
  prosecuting any action against Travelers
  Indemnity Company of Illinois or their insureds
  for the recovery of any amount therefrom arising
  out of the occurrence and policy at issue here;
  2. That all parties with potential claims, liens,
  or demands are required to make known their
  intentions and join this action on or before May
  16, 1985.

The summary judgment motions now pending ask the Court to decide essentially two issues: (1) whether Count I of the hospital's claim against the estate of Gregory Moore is barred by its alleged failure to comply with Ill.Rev.Stat., ch. 110 1/2, ยง 18-12, requiring that all claims against the estate be filed with the administrator or the Court; and (2) whether this federal court, sitting in Illinois in an interpleader action, should enforce the hospital's lien (which arises under District of Columbia law) against the proceeds of an Illinois ...


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