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08/01/94 DIOCELINA TERESA PADILLA AND J. AMPARO

August 1, 1994

DIOCELINA TERESA PADILLA AND J. AMPARO PADILLA, INDIVIDUALLY, AND AS PARENTS AND NEXT FRIEND OF FERNANDO PADILLA, A MINOR, PLAINTIFFS,
v.
NORWEGIAN-AMERICAN HOSPITAL, INC., ET AL., DEFENDANTS. NORWEGIAN-AMERICAN HOSPITAL, INC., AND CHICAGO HOSPITAL RISK POOLING PROGRAM, IN THEIR OWN CAPACITY AND SUBROGEE OF HONORATO ABADILLA, M.D., INTERVENORS-APPELLEES, V. ILLINOIS STATE MEDICAL INTER-INSURANCE EXCHANGE, RESPONDENT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE ARTHUR A. SULLIVAN, JUDGE PRESIDING.

Rehearing Denied September 29, 1994.

Campbell, Buckley, O'connor, Jr.

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

Respondent Illinois State Medical Inter-Insurance Exchange ("ISMIE") appeals an order of the circuit court of Cook County permitting intervenor Chicago Hospital Risk Pooling Program ("CHRPP") to intervene in this action between plaintiffs Diocelina Teresa Padilla and J. Amparo Padilla, individually and as parents and next friends of Fernando Padilla, a minor, and defendants Norwegian-American Hospital ("Hospital") and Dr. Honorato Abadilla. ISMIE also appeals the trial court's order granting judgment on the pleadings to CHRPP; the order is based on the determination that ISMIE is the primary insurer of Dr. Abadilla in this medical malpractice case.

The record on appeal indicates the following facts. On May 30, 1985, the Padillas filed a medical malpractice action against the Hospital, Dr. Abadilla and other defendants who are not named in this appeal. The medical malpractice action appears to relate to the birth and delivery of Fernando Padilla on January 22, 1985. Dr. Abadilla was insured by ISMIE up to a limit of $1,000,000 per occurrence. ISMIE provided Dr. Abadilla with a defense at the inception of the lawsuit.

CHRPP is a trust established to insure certain non-profit hospitals against the risks of legal liability of providing health care to patients. The Hospital participates in CHRPP, which provides up to $5,000,000 of protection per occurrence. It is undisputed that Dr. Abadilla is also a "covered person" under the trust agreement in this case.

Throughout pretrial proceedings in this case, ISMIE took the position that Dr. Abadilla was not liable and refused to offer any money in settlement of the suit. Norwegian and other defendants, however, settled the claims against them for a sum in excess of $4,000,000 (at a time apparently left unspecified in the record).

The record includes a letter dated October 1, 1990, in which the counsel retained by ISMIE tenders the defense of Dr. Abadilla to CHRPP, contending that the CHRPP agreement provides primary coverage and the ISMIE policy provides excess coverage in this matter. This contention was based on counsel's interpretation of "other insurance" clauses that were part of the ISMIE policy and the CHRPP trust agreement. The record also includes response correspondence from CHRPP's counsel, dated December 26, 1990, indicating that CHRPP disagreed on the coverage issue and that CHRPP would protect its interests in this matter, possibly by filing for a declaratory judgment.

This matter was scheduled to come to trial on May 15, 1991. The record contains a letter dated May 15, 1991, from CHRPP's counsel to Dr. Abadilla's counsel indicating a willingness to settle, subject to a reservation of rights, if ISMIE would contribute fifty percent of a reasonable settlement. A settlement conference was held before Judge Walter Kowalski in the circuit court of Cook County the same day. CHRPP expressed a willingness to reach a settlement of the entire suit, including the claims against Dr. Abadilla. A claims representative of ISMIE attended this conference. ISMIE did not offer any sum in settlement of the claims against Dr. Abadilla. CHRPP then submitted a written motion for leave to intervene in the suit, which was granted by Judge Kowalski.

On May 16, 1991, the parties reached an overall settlement of the case; CHRPP agreed to pay plaintiffs $525,000 on behalf of Dr. Abadilla. The same day, CHRPP filed a complaint in intervention against ISMIE seeking a declaration that ISMIE was the primary insurer and that CHRPP provided coverage in excess of the $1,000,000 limit of the ISMIE policy. The complaint also sought contribution from ISMIE in the event that CHRPP had paid the settlement prior to judgment on the coverage issue. CHRPP amended this complaint on May 21, 1991.

ISMIE filed a motion to dismiss the complaint in intervention on June 6, 1991. ISMIE contended that the dispute between CHRPP and ISMIE lacked issues of law or fact in common with the medical malpractice suit and should have been brought as a separate action. ISMIE further contended that CHRPP was not a proper party to intervene in this case. After considering legal memoranda and oral argument, the trial court denied the motion to dismiss on July 9, 1991.

Although the date is not entirely legible, it appears that ISMIE filed a motion to return the case to the motion call on August 27, 1991. ISMIE filed its answer to the amended complaint in intervention on September 5, 1991. ISMIE notified CHRPP that it would present its motion to return the case to the motion call on September 6, 1991. Both parties filed motions for judgment on the pleadings, pursuant to section 2-615(e) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1991, ch. 110, par. 2-615(e)), on November 1, 1991. ISMIE's motion for judgment on the pleadings indicates that the cross-motions were filed by agreement of the parties, in consultation with Judge Sullivan, on September 6, 1991.

On March 25, 1992, Judge Sullivan entered an order granting judgment on the pleadings in favor of CHRPP. Judge Sullivan indicated in the order that the ISMIE policy provides primary coverage and that CHRPP trust agreement did not trigger an excess clause in the ...


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