The opinion of the court was delivered by: ANN CLAIRE WILLIAMS
Defendants Sheila and Peter Hall went to defendant Psychotherapist Steven H. Stone ("Stone") for marital counseling. Stone engaged in a sexual relationship with Sheila Hall during professional treatment and therapy. Plaintiff American Home Assurance Co. ("American Home") brought this suit seeking a declaration that American Home's obligation to indemnify Stone is limited to $ 25,000 for any settlement or judgment entered in the underlying lawsuits filed by the Halls.
This matter is before the court on the parties' cross-motions for summary judgment.
At all relevant times, defendant Stone was a psychotherapist/divorce mediator working for defendant the Psych Associates of Du Page, Chtd. ("Psych Associates").
Beginning on June 13, 1990, Sheila and Peter Hall began seeing Stone for marriage counseling. After the Halls had participated in several weekly joint sessions, Stone recommended and began individual therapy sessions with each of the Halls in July, 1990.
On March 18, 1992, Peter Hall filed suit against Stone and Psyche Associates in the Circuit Court of the Eighteenth Judicial Circuit, DuPage County, IL. In his negligence count against Stone, Peter Hall alleged, among other things:
(Pl.'s Ex. B, First Amended Complaint of Peter Hall P 4(e) at 2). Peter Hall also claimed intentional infliction of emotional harm on the same grounds. (Id. P 4 at 4). Specifically, Peter Hall alleged that "some time in the fall of 1990, while still allegedly providing this plaintiff with marriage counseling services, [Stone] began sleeping and having sex with Plaintiff's wife who he was also providing marriage counseling to at the same time . . . ." (Id. P 5(a) at 4-5).
On June 9, 1992, Sheila Hall filed a complaint in the Circuit Court of DuPage County against Stone, Psych Associates, psychiatrist Phillip Helding,
and psychotherapist Leland Martin.
Sheila Hall's complaint included counts against Stone for malpractice, violation of the Sexual Exploitation and Psychotherapy Act, Ill. Rev. Stat., ch. 70, § 801, et seq., and intentional and negligent infliction of emotional distress. Sheila Hall alleged, inter alia:
In the course of treatment and therapy, Stone so aroused Plaintiff's emotions by the manipulation of the transference phenomenon that she fell in love with him. . . . As a result of this manipulation of the transference phenomenon, Plaintiff began a sexual relationship with Stone.
That Plaintiff was a patient of Stone and was receiving psychotherapy from Stone, as a psychotherapist, when he began having sexual contact with her.
That as a direct and proximate cause of Stone's sexual contact with the Plaintiff . . . Plaintiff has experienced extreme pain and suffering, as well as emotional distress of a continuing and permanent nature, including an attempted suicide, which has required medical treatment.
(Ex. C, First Amended Complaint of Sheila Hall P 10(a) at 2-3, PP 13, 14 at 4-5).
On July 8, 1993, Devin and Brenden Hall, through their father, Peter, filed a complaint in the Circuit Court of Du Page County against Stone, Psych Associates, and Phillip Helding. Brenden and Devin participated in several family therapy sessions and alleged:
That during the aforedescribed [marriage] counseling, Defendant, Stone, contrary to his fiduciary obligations to [Devin and Brenden], engaged in a course of sexual conduct with Sheila Hall when Defendant Stone knew, or reasonably should have known, that said conduct would make it impossible to resolve the aforereferenced discord.
(Complaint P 4(e) at 2; P 4(e) at 10).
Additionally, Psych Associates has filed counterclaims for indemnity and contribution in the pending state court actions against Stone.
Stone is insured by plaintiff American Home under its Mental Health Counselor's Professional Liability Policy No. MHC-4304539, effective March 1, 1990 to March 1, 1991. The limits of liability are $ 1,000,000 for "each wrongful act or series of continuous, repeated or interrelated wrongful acts or occurrence," and $ 3,000,000 "aggregate." (American Home Policy, Declarations Page). However, at the top of the Declarations Page and on the first page of the Insuring Agreement the policy notes in small capital letters: "A smaller limit of liability applies to judgements or settlements when there are allegations of sexual misconduct (see the Special Provision "Sexual Misconduct" in the Policy)." The "Sexual Misconduct" provision limits liability to $ 25,000 aggregate
(Id., Special Provisions, at 5-6).
American Home filed this action seeking a declaration that the $ 25,000 Sexual Misconduct limitation is applicable to its potential obligation to indemnify Stone. Plaintiff is providing Stone with a defense subject to a reservation of rights.
On July 6, 1993, American Home filed a motion for summary judgment on the grounds that there is no genuine issue of material fact that the underlying claimants have alleged that Stone engaged in a sexual relationship with Sheila Hall and that therefore, ...