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SMITH v. HMO GREAT LAKES

May 10, 1994

PEGGY SMITH, Individually, and as Mother and Next Friend of GINNY IRENE SMITH, and CHARLES A. SMITH, Plaintiffs,
v.
HMO GREAT LAKES, a corporation, JOHN VIVERITO, THOMAS LIANG GAN, BHARTHI B. RAO, KEUN CHA, ELLEN FRANKS, DELNOR COMMUNITY HOSPITAL, a corporation, Defendants.


HOLDERMAN


The opinion of the court was delivered by: JAMES F. HOLDERMAN

JAMES F. HOLDERMAN, District Judge:

 Plaintiffs Peggy Smith and Charles Smith originally filed a sixteen-count complaint on behalf of themselves and their child Ginny Irene Smith in the Circuit Court of Cook County, Illinois, against defendants HMO Great Lakes ("HMO"), John Viverito, Thomas Liang Gan, Bharthi B. Rao, Keun Cha, Ellen Franks and Delnor Community Hospital alleging medical malpractice. Defendant HMO removed this case from state court into federal court on August 25, 1993, pursuant to 28 U.S.C. § 1441(b), stating that this court has original subject matter jurisdiction based upon § 502(e) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(e), and 28 U.S.C. § 1331.

 Defendant John Viverito has filed a motion to sever the causes of action plead against him from the causes of action alleged against defendant HMO and to remand the causes of action against him back to the Circuit Court of Cook County, Illinois. Defendant HMO has also filed a motion to dismiss plaintiffs' complaint or, in the alternative, a motion for summary judgment arguing that plaintiffs' claim is preempted by ERISA. For the reasons stated below, defendant Viverito's motion to sever and remand is moot, defendant HMO's motion to dismiss is denied, and defendant HMO's motion for summary judgment is denied.

 BACKGROUND

 Defendant HMO contracted with plaintiff Charles Smith's employer, Savin, Inc., to arrange health care services for eligible employees who enroll in the plan. *fn1" Charles Smith was a beneficiary of Savin's employee health benefit plan and enrolled in defendant HMO's plan for himself, and his dependents, including his wife, Peggy Smith and Ginny Irene Smith, his daughter. Defendant HMO is under contract with Delnor Community Hospital, whereby Delnor is to make medical facilities available to HMO members and the physicians who treat the plan members. *fn2" On November 17, 1988, Mrs. Peggy Smith, while under the care of Dr. John Viverito, Dr. Bharthi Rao, Dr. Ellen Franks, Dr. Thomas Liang Gan, Dr. Keun Cha and Delnor Community Hospital, gave birth by caesarian section to Ginny Irene Smith. Plaintiffs claim that defendants failed to properly care for and deliver Ginny and that she suffers from severe disabilities as a result of fetal distress during her birth.

 Plaintiffs allegations against defendant HMO are as follows:

 
10. Upon information and belief, defendant Gan and defendant HMO had a contract which created financial penalties if defendant Gan obtained consultations from specialty physicians who contracted with defendant HMO.
 
11. Upon information and belief, defendant Gan and defendant HMO had a contract which prohibited or limited defendant Gan from obtaining medical consultations from other specialty physicians who did not contract with defendant HMO.
 
12. Upon information and belief, defendant Gan and defendant HMO had a contract which created financial penalties if defendant Gan admitted or transferred the plaintiffs to other hospitals who contracted with defendant HMO.
 
13. Upon information and belief, defendant Gan and defendant HMO had a contract which prohibited or limited defendant Gan from admitting or transferring the plaintiffs to other hospitals who did not contract with defendant HMO.
 
18. On November 16, 1988, and thereafter, defendant HMO and defendant Delnor and defendant Gan negligently breached their aforesaid duty through one or more of the following acts and/or omissions:
 
(a) failed to obtain a consultation by an obstetrician-gynecologist skilled in the treatment of high risk pregnancies; and/or,
 
(b) failed to properly provide reasonable preoperative, postoperative care and treatment to ...

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