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05/23/94 HARTFORD CASUALTY INSURANCE COMPANY v.

May 23, 1994

HARTFORD CASUALTY INSURANCE COMPANY, A CORPORATION, PLAINTIFF,
v.
THE MEDICAL PROTECTIVE COMPANY OF FORT WAYNE, INDIANA, A CORPORATION, DEFENDANT, HARTFORD CASUALTY INSURANCE COMPANY, A CORPORATION, PLAINTIFF-APPELLEE/CROSS-APPELLANT, V. THE MEDICAL PROTECTIVE COMPANY OF FORT WAYNE, INDIANA, A CORPORATION, DEFENDANT-APPELLANT/CROSS-APPELLEE.



Appeal from the Circuit Court of Cook County. The Honorable Robert L. Sklodowski, Judge Presiding.

Rehearing Denied October 18, 1994.

Manning, Campbell, O'connor, Jr.

The opinion of the court was delivered by: Manning

JUSTICE MANNING delivered the opinion of the court:

This declaratory judgment action arises on appeal and cross appeal from the entry of summary judgment and a money judgment in the amount of $736,811.00 in favor of plaintiff Hartford Casualty Insurance (Hartford) and against defendant Medical Protective Company of Fort Wayne (MedPro), as well as a denial of Hartford's motion for prejudgment interest. For the reasons which follow, we reverse the trial court's grant of summary judgment and vacate the money judgment.

In 1986, the Circuit Court of Cook County entered judgment, after a jury verdict, in favor of Rita M. Richter and against Dr. Seymour Diamond, Diamond Baltes Medical Associates, Ltd. and the Diamond Headache Clinic, Ltd., in the amount of $15,707,535.00 for negligence in the treatment of Ms. Richter between 1973 and 1978, inclusive. In 1987, the three insurance carriers (Hartford, MedPro and the Illinois State Medical Insurance Exchange or "ISMIE"), all of whom provided coverage for Dr. Diamond and/or the clinic, settled the Richter judgment for $6,000,000.00 as to Dr. Diamond and the Headache Clinic, discharging each of them from any and all causes of action and claims on account of any and all known and unknown personal injuries resulting from the negligent treatment by Dr. Diamond and the clinic during the years 1973 through 1978.

Subsequently Hartford, having paid under a reservation of rights, filed this declaratory judgment action against MedPro seeking a determination that it is entitled to recover additional monies from MedPro as a result of the settlement. It asserted in its complaint that MedPro should tender an additional $1,200,000.00 to Hartford for MedPro's alleged pro rata share of the settlement. It was Hartford's position that MedPro owed the policy limits of its policy for each period under which MedPro insured the tort defendants.

ISMIE's policies No. 203214 and 30699 ran from July 1, 1976 through June 30, 1977; Hartford's policies No. 83-206855 and No. 83-102852 ran from March 15, 1976 through June 30, 1976; and MedPro's policy No. 400642 ran from March 15, 1973 through March 15, 1974. MedPro's policy was renewed the following two years, running successively from March 15, 1974 through March 15, 1975 and from March 15, 1975 through March 15, 1976.

The provisions of MedPro's policy provided, in pertinent part:

The Company agrees to DEFEND and PAY DAMAGES, in the name and on behalf of the insured or his estate,

A. IN ANY CLAIM FOR DAMAGES, AT ANY TIME FILED, BASED ON PROFESSIONAL SERVICES RENDERED OR WHICH SHOULD HAVE BEEN RENDERED, BY THE INSURED OR ANY OTHER PERSON, IN THE PRACTICE OF THE INSURED'S PROFESSION (INCLUDING INJURY SUSTAINED BY ANY PATIENT OR ANYONE ACCOMPANYING A PATIENT WHILE IN THE INSURED'S OFFICE), DURING THE TERM OF THIS POLICY; EXCEPT this policy does not cover. . . .

The Company's liability for damages shall not exceed the minimum amount herein stated in any one occurrence and subject to the same limit for each occurrence the Company's total liability, during one policy year, shall not exceed the maximum amount herein stated. . . .

MedPro contends that the circuit court erroneously granted summary judgment in favor of Hartford. It reasserts, as it did in the trial court, that the subject policies, being renewal policies, are not subject to stacking. MedPro further argues that the Illinois rules on contract construction requires the court to interpret an insurance contract based upon the intent of the parties.

We view the issues before the court as whether annually renewed insurance policies are subject to stacking when the occurrence triggering the coverage in question is a continuing one over a period of years and whether prejudgment interest is appropriate where a declaratory judgment ...


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